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

The following income statement was drawn from the records of Butler Company. a merchandising rrn: BUTLER COMPANY Income Statement For the Year Ended December 31, 2014 Sales revenue [2.000 units K $35] $ 550.000 Cost of goods sold [2.000 unite x 3146] (292.000) Gross margin 258.000 Sales commissions [10% of sales) (55.000) Administrative salaries expense (80.000) Advertising expense (38.000) Depreciation expense (50.000) Shipping and handling expenses (2,000 units it $1.50} (3,000) Net income $ 32.000 Required a. Reconstruct the income statement using the contribution margin format. - - - - - b. Calculate the magnitude of operating leverage. [Round your answer to 2 decimal places.} c. Use the measure of operating leverage to determine the amount of net income Butler will eam if sales increase by 10 percent. (Do not round Intermediate calculations.) -:|