Saved The following income statement applies to Thornton Company for the current year. Income Statement Sales revenue (500 units * $40) $ 20,000 Variable cost (500 units * $25) (12,500) Contribution margin 7,500 Pixed cost (5,000) Net Income $2,500 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 Thornton Compa will earn if it experiences a 10 percent increase in revenue. The sales price per unit is not affected, 0-1. Verify your answer to Requirement b by constructing an income statement based on a 10 percent increase in sales revenue. T 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. Reg A and B Reg 1 Reg C2 Use the contribution margin approach to calculate the magnitude of operating leverage, use the operating leverage measure computed in Requirement a to determine the amount of net income that Thornton Company will eam if it experiences a 10 percent increase in revenue. The sales price per unit is not affected. (Do not round Intermediate calculations. Round "Operating leverage" to 2 decimal place.) Operating leverages Not income b b . 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 Thornton Company will earn Hit experiences a 10 percent increase in revenue. The sales price per unit is not affected. 0-1. Verify your answer to Requirement b by constructing an income statement based on a 10 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. Reg A and B Req cI Reg C2 Verify your answer to Requirement b by constructing an income statement based on a 10 percent increase in sales revenue. The sales price is not affected. Annual Income Statement Sales revenue Variable cost Contribution margin + Fixed cost Not income $ 0 0 Income Statement Sales revenue (500 units $40) Variable cont (500 units X $25) Contribution margin Fixed cost Net Income $ 20,000 (12,500) 7,500 (5,000) $ 2,500 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 Thornton Company will earn if it experiences a 10 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 10 percent increase in sales revenue. The sales price is not affected, c2. Calculate the percentage change in net income for the two income statements. Complete this question by entering your answers in the tabs below. Reg A and B Reg CI Reg C2 Calculate the percentage change in net income for the two income statements. Change in net income