Europa Publications, Inc., specializes in reference books that keep abreast of the rapidly changing political and economic issues in Europe. The results of the company$$s operations during the prior year are given in the following table. All units produced during the year were sold. $($Ignore income taxes.$)$

Sales revenue $ $1,100,000$

Manufacturing costs:

Fixed $222,000$

Variable $605,000$

Selling costs:

Fixed $22,000$

Variable $52,000$

Administrative costs:

Fixed $62,000$

Variable $17,000$

Required:

$1-$a$.$ Prepare a traditional income statement for the company.

$1-$b$.$ Prepare a contribution income statement for the company.

$2.$ What is the firm$$s operating leverage for the sales volume generated during the prior year?

$3.$ Suppose sales revenue increases by $14$ percent. What will be the percentage increase in net income?

$4.$ Which income statement would an operating manager use to answer requirement $3?$