The following income statement was drawn from the records of Gibson, a merchandising firms Pin GIBSON COMPANY Income Statement For the Year Ended December 31 Sales revenue (6,500 units x $164) costos gnods sold (6,500 units * $87) Gross margin Sales commissions (5% of sales) Administrative salaries expense Advertising expense Depreciation expense Shipping and handling expenses (6,500 units * $2) Net income $1,066,000 (565,580) 500, 500 (53,300) (83,000) (36,000) (44,000) (13,000 $ 271,200 Regulrece 3. Reconstruct the income statement using the contribution margin format Calculate the magnitude of operating leverage c. Use the measure of operating leverage to determine the amount of net come Elbion will earn it sal increase by 20 percent Complete this question by entering your answers in the tabs below. RA Red Band Calculate the magnitude of operating leverage. Use the measure of operating severage to determine the amount of net income Ginsen will earn if sales increase by 20 percent. (Round your intermediate calculations and Operating leverage decimal price Round the Net Income value to nearest whole dollar) Open Beverage No Vox FICUT III WCH WUS VEHICULUM VITUTT GIBSON COMPANY Income Statement For the Year Ended December 31 Sales revenue (6,500 units * $164) Cost of goods sold (6,500 units * $87) Gross margin Sales commissions (5% of sales) Administrative salaries expense Advertising expense Depreciation expense Shipping and handling expenses (6,500 units * $2) Net income $1,066,000 (565,500) 500,500 (53,300) (83,000) (36,000) (44,000) (13,000 $ 271,200 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 Gibson will earn if sales increase by 20 per Complete this question by entering your answers in the tabs below. Req A Req B and C Calculate the magnitude of operating leverage. Use the measure of operating leverage to determine the amount of net income Gibson will earn if sales increase by 20 percent. (Round your intermediate calculations and Operating leverage answer to 2 decimal places. Round the "Net Income" value to nearest whole dollar.) b. Operating leverage Net income C