Learning Objectives: 5-5 Prepare an income statement using the contribution margin approach 5-6 Calculate the magnitude of operating leverage The following income statement was drawn from the records of Zachary, a merchandising firm: 2:54:29 ZACHARY COMPANY Income Statement For the Year Ended December 31 Sales revenue (6,000 units x $162) Cost of goods sold (6,000 units X $87) Gross margin Sales comissions (101 of sales) Administrative salaries expense Advertising expense Depreciation expense Shipping and handling expenses (6,000 units * $2) Het Income $ 972,000 (522,000) 450,000 (97,200) (87,000) (37,000) (41,000) (12.000) $ 175,800 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 Zachary will earn if sales increase by 20 percen Complete this question by entering your answers in the tabs below. Reg A RGB and C Snow 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 Zachary will earn if sales increase by 20 percent. Complete this question by entering your answers in the tabs below. Reg A Reg B and C Reconstruct the income statement using the contribution margin format ZACHARY COMPANY Income Statement For the Year Ended December 31 Less: Variable costs Less Fixed costs ook Problems Saved 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 Zachary will earn if sales increase by 20 percen Complete this question by entering your answers in the tabs below. Reg A Reg B and Calculate the magnitude of operating leverage. Use the measure of operating leverage to determine the amount of net income Zachary will earn if sales increase by 20 percent. (Round your intermediate calculations and Operating leverage" answer to 2 decimal places. Round the "Net Income" value to nearest whole dollar) b. Operating loverage Net Income