Sales revenue (5,500 units $164) Cost of goods sold (5,500 units * $82) FINCH COMPANY Income Statement For the Year Ended December 31, Year 1 $902,000 (451,000) Gross margin 451,000 Sales commissions (10% of sales) (90,200) Administrative salaries expense (90,000) Advertising expense (31,000) (42,000) Shipping and handling expenses (5,500 units * $5) (27,500) $170,300 Depreciation expense 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 Finch 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 format. FINCH COMPANY Income Statement For the Year Ended December 31, Year 1 Less: Variable costs Less: Fixed costs 0 $ Req A Req B and C > Req A Req B and C b. Calculate the magnitude of operating leverage. c. Use the measure of operating leverage to determine the amount of net income Finch will earn if sales increase by 20 percent. Note: Round your intermediate calculations and "Operating leverage" answer to 2 decimal places. Round the "Net income" value to nearest whole dollar. b. Operating leverage c. Net income Show less A