The following income statement was drawn from the records of Rundle, a merchandising firm: RUNDLE COMPANY Income Statement For the Year Ended December 31 Sales revenue (5,000 units x $170) $ 850,000 Cost of goods sold (5,000 units x $84) (420,000) Gross margin 430,000 Sales commissions (54 of sales) (42,500) Administrative salaries expense (86,000) Advertising expense (39,000) Depreciation expense (50,000) Shipping and handling expenses (5,000 units x $3) (15, 000) Net income $ 197,500 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 Rundle will earn its 20 percent. Answer is not complete. Complete this question by entering your answers in the tabs below. > 1.141,000 Req A Reg B and C Reconstruct the income statement using the contribution margin format. RUNDLE COMPANY Income Statement For the Year Ended December 31 Sales revenue Less: Variable costs Sales commissions 114,100% Shipping and handling 14,000x expenses 588,000X 716,100% Contribution margin 1291,200) Less: Fixed costs Administrative salaries 80,000 Advertising expense 38,000x Depreciation expense 47,000 165,000X Net income (621,200) ROGA ReqB and C > The following income statement was drawn from the records of Rundle, a merchandising firm RUNDLE COMPANY Income Statement For the Year Ended December 31 Sales revenue (5,000 units x $170) $ 850,000 Cost of goods sold (5,000 units x $84) (420,000) Gross margin 430,000 Sales commissions (54 of sales) (42,500) Administrative salaries expense (86,000) Advertising expense (39,000) Depreciation expense (50,000) Shipping and handling expenses (5,800 units x $3) (15,000) Net income $ 197,500 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 Rundle will 20 percent. Answer is not complete. Complete this question by entering your answers in the tabs below. Req B Reg A and C Calculate the magnitude of operating leverage. Use the measure of operating le determine the amount of net income Rundle will earn if sales increase by 20 pe (Round your intermediate calculations and "Operating leverage" answer to 2 de places. Round the "Net income" value to nearest whole dollar.) Sh b. Operating leverage Net income c.