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

Sales revenue	$	1,350,000
Manufacturing costs:
Fixed		382,000
Variable		625,000
Selling costs:
Fixed		27,000
Variable		57,000
Administrative costs:
Fixed		67,000
Variable		22,000

Required:

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

2. 1-b. Prepare a contribution income statement for the company.

3. 2. What is the firms operating leverage for the sales volume generated during the prior year?

4. 3. Suppose sales revenue increases by 12 percent. What will be the percentage increase in net income?

5. 4. Which income statement would an operating manager use to answer requirement (3)?

For both 1A and 1B, it keeps telling me that I have not completed the questions but cannot figure out what else is needed.

Complete this question by entering your answers in the tabs below. Reg 1A Req 1B Req 2 Reg 3 Req 4 Prepare a traditional income statement for the company. EUROPA PUBLICATIONS, INC. Income Statement For the Year Ended December 31, 20XX Sales $ 1,350,000 Cost of goods sold 1,007,000 Gross margin $ 343,000 Operating expenses: Administrative expenses Selling expenses 0 Net income $ 343,000 Req 1A Req 1B Reg 2 Req 3 Req 4 Prepare a contribution income statement for the company. EUROPA PUBLICATIONS, INC. Income Statement For the Year Ended December 31, 20XX Sales $ 1,350,000 $ 22,000 Variable expenses: Variable administrative expense Variable manufacturing expense Variable selling expense 625,000 57,000 704,000 $ 646,000 Contribution margin Fixed expenses: Fixed administrative expense Fixed manufacturing expense Fixed selling expense $ 67,000 382,000 27,000 476,000 $ 170,000 Net income