Pacific Rim Publications, Inc., specializes in reference books that keep abreast of political and economic issues in the Pacific Rim countries. The results of the companys operations during the prior year are given in the following table. All units produced during the year were sold. (Ignore income taxes.)

Sales revenue	$	1,150,000
Manufacturing costs:
Fixed		252,000
Variable		611,000
Selling costs:
Fixed		23,000
Variable		53,000
Administrative costs:
Fixed		63,000
Variable		18,000

Required:

1-a.	Prepare a traditional income statement for the company.

1-b.	Prepare a contribution income statement for the company.

2.	What is the firms operating leverage for the sales volume generated during the prior year? (Round your answer to 2 decimal places.)

3.	Suppose sales revenue increases by 15 percent. What will be the percentage increase in net income?(Do not round intermediate calculations and round your final answer to 1 decimal place.)

4.

Which income statement would an operating manager use to answer part (3)?

	Contribution income statement
	Traditional income statement