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

$\backslash$table$[[$SOLOMON COMPANY$],[$Income Statement,,$],[$For the Year Ended December $31,$ Year $1,,],[$Sales revenue units $$$$167,$$$751,500,],[$Cost of goods sold units $$$$87,(391,500),],[$Gross margin,$360,000,],[$Sales commissions $(5\%$ of sales$),(37,575),],[$Administrative salaries expense,$(88,000),],[$Advertising expense,$(35,000),],[$Depreciation expense,$(47,000),],[$Shipping and handling expenses units $$$$5,(22,500),],[$Net income,,$]]$

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 Solomon will earn if sales increase by $20$ percent.C