The following income statement was drawn from the records of Fanning Company, a merchandising firm FANNING COMPANY Income Statement For the Year Ended December 31, 2018 Sales revenue (8,000 units x $169) Cost of goods sold (8,000 units x $89) Gross margin Sales commissions (5% of sales) Administrative salaries expense Advertising expense Depreciation expense Shipping and handling expenses (8,000 units x $3) Net income $1,352,0ee (712,900) 640,008 (67,600) (88,000) (37,000) (44,000) (24,0e0) $ 379,400 Requirec 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 Fanning will earn if sales increase by 20 percent. Complete this question by entering your answers in the tabs below Required A Req B and C Reconstruct the income statement using the contribution margin format. FANNING COMPANY Income Statement For the Year Ended December 31, 2018 Less: Variable costs Less: Fixed costs Required A Req B and C > Required AReq B and C Calculate the magnitude of operating leverage. Use the measure of operating leverage to determine the amount of net income Fanning will earn if sales increase by 20 percent. (Round intermediate and "Operating leverage" answer to 2 decimal places.) b. Operating leverage c. Net income times Required A Req B and C