The following income statement was drawn from the records of Campbell Company, a merchandising firm: CAMPBELL COMPANY Income Statement For the Year Ended December 31, 2018 Sales revenue (7,000 units x $162) Cost of goods sold (7,800 units x $84) Gross margin Sales commissions (10% of sales) Administrative salaries expense Advertising expense Depreciation expense Shipping and handling expenses (7,000 units x $1) Net income $1,134,000 (588,000) 546,000 (113,400) (80,000) (35,00) (45,000) (7,eee) $ 265,600 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 Campbell will earn if sales increase by 10 percent. Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Req B and Reconstruct the income statement using the contribution margin format. CAMPBELL COMPANY Income Statement For the Year Ended December 31, 2018 Sales revenue $ 1,134,000 Less: Variable costs Cost of goods sold 588.000 Sales commissions 113.400 Shipping and handling expenses 7,000 > 425,600 Contribution margin Less: Fixed costs Administrative salaries Advertising expense Depreciation expense 80.000 35.000 45.000 S 265,600 Exercise 2-13A Using contribution margin format income statement to measure the magnitude of operating leverage LO 2-3, 2-4 The following income statement was drawn from the records of Campbell Company, a merchandising firm: CAMPBELL COMPANY Income Statement For the Year Ended December 31, 2018 Sales revenue (7,000 units * $162) Cost of goods sold (7,000 units * $84) Gross margin Sales commissions (10% of sales) Administrative salaries expense Advertising expense Depreciation expense Shipping and handling expenses (7,000 units x $1) Net income $1,134,000 (588,000) 546,000 (113,400) (80,000) (35,000) (45,000) (7,000) $ 265,600 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 Campbell will earn if sales increase by 10 percent. Complete this question by entering your answers in the tabs below. Required A Reg B and C Calculate the magnitude of operating leverage. Use the measure of operating leverage to determine the amount of net income Campbell will earn if sales increase by 10 percent. (Round intermediate and "Operating leverage" answer to 2 decimal places.) b. times Operating leverage Net income C