The following income statement was drawn from the records of Thornton Company, a merchandising firm:

THORNTON COMPANY
Income Statement
For the Year Ended December 31, 2018
Sales revenue (5,000 units $160)	$	800,000
Cost of goods sold (5,000 units $81)		(405,000	)
Gross margin		395,000
Sales commissions (10% of sales)		(80,000	)
Administrative salaries expense		(89,000	)
Advertising expense		(40,000	)
Depreciation expense		(46,000	)
Shipping and handling expenses (5,000 units $2)		(10,000	)
Net income	$	130,000

Required

1. Reconstruct the income statement using the contribution margin format.

2. Calculate the magnitude of operating leverage.

3. Use the measure of operating leverage to determine the amount of net income Thornton will earn if sales increase by 20 percent.

Please explain how you got the numbers. I am having a difficult time getting the operating leverage. and the net income if sales increase 20%.