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The following income statement was drawn from the records of Walton Company. a merchandising firm: WALTON COMPANY Income Statement For the Year Ended December 31, Year 1 Sales revenue (7,090 units * $161) $1, 127, egg Cost of goods sold (7, 608 units = 382) (574 gue) Gross margin 553 808 Sales commissions (10% of sales) (1 12, 786) Administrative salaries expense Advertising expense Depreciation expense 46, bee Shipping and handling expenses (7, see units * $1) Net income $ 270,380 ces Required . 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 Walton will earn if sales increase by 20 percent. Complete this question by entering your answers in the tabs below. Req A Req B and C Reconstruct the income statement using the contribution margin fo WALTON COMPANY Income Statement For the Year Ended December 31, Year 1 less: Variable costs Less: Fixed costs