Europa Publications, Incorporated, 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 $ $1,300,000$

Manufacturing costs:

Fixed $348,000$

Variable $623,000$

Selling costs:

Fixed $26,000$

Variable $56,000$

Administrative costs:

Fixed $66,000$

Variable $21,000$

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 $3?$