Exercise 2-14A (Algo) Assessing the magnitude of operating leverage LO 2-4 The following income statement applies to Benson Company for the current year: Income Statement Sales revenue (370 units x $27) Variable cost (370 units X $12) Contribution margin Fixed cost Net income $ 9,990 (4,440) 5,550 (3,700) $ 1,850 Required a. Use the contribution margin approach to calculate the magnitude of operating leverage. b. Use the operating leverage measure computed in Requirement a to determine the amount of net income that Benson Company will earn if it experiences a 20 percent increase in revenue. The sales price per unit is not affected. C-1. Verify your answer to Requirement b by constructing an income statement based on a 20 percent increase in sales revenue. The sales price is not affected. C-2. Calculate the percentage change in net income for the two income statements. Complete this question by entering your answers in the tabs below. Req A and B Req C1 Reg C2 Use the contribution margin approach to calculate the magnitude of operating leverage. Afterwards, use the operating leverage measure previously computed for Requirement A to determine the amount of net income that Benson Company will earn if it experiences a 20 percent increase in revenue. The sales price per unit is not affected. (Do not round intermediate calculations. Round "Operating leverage" to 2 decimal place.) Show less a. b. Operating leverage Net income Req A and B ReqC1 > Complete this question by entering your answers in the tabs below. Req A and B Req C1 Req c2 Verify your answer to Requirement b by constructing an income statement based on a 20 percent increase in sales revenue. The sales price is not affected. Annual Income Statement Sales revenue Variable cost Contribution margin Fixed cost Net income 0 Complete this question by entering your answers in the tabs below. Req A and B Req C1 Reg C2 Calculate the percentage change in net income for the two income statements. Change in net income %