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Exercise 11-15 Using contribution margin format income statement to measure the magnitude of operating leverage LO 11-3, 11-4 The following income statement was drawn from
Exercise 11-15 Using contribution margin format income statement to measure the magnitude of operating leverage LO 11-3, 11-4 The following income statement was drawn from the records of Adams Company, a merchandising firm ADAMS COMPANY Income Statement For the Year Ended December 31, 2018 Sales revenue (5,000 units $166) Cost of goods sold (5,000 units * $84) Gross margin Sales com salons (104 of sales) Administrative salaries expense Advertising expense Depreciation expense Shipping and handling expenses (5,000 units * $ 30,000 (420,000) 110,000 (83,000) (90,000) (33,000) (41.000) (15,000) $ 110,000 Net Income Required a. Reconstruct the income statement using the contribution margin format b. Calculate the magnitude of operating leverage. c. Use the measure of operating leverage to determine the amount of net income Adams will eam if sales increase by 20 percent. o Bio eere to search Reg A Req B and C Reconstruct the income statement using the contribution margin format. ALS COMPANY For the Year Ended December 31, 2018 Less: Variable costs Less: Fixed costs search oo hp c. Use the measure of operating leverage to determine the amount of net income Adams will earn if sales increase by 20 perc Complete this question by entering your answers in the tabs below. . Reg A Req B and C Calculate the magnitude of operating leverage. Use the measure of operating leverage to determine the amount of net! income Adams will eam if sales increase by 20 percent. (Round "Operating leverage to 2 decimal places and round Net income answer to nearest whole dollar.) times Operating leverage c. Net income arch
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