The following income statement was drawn from the records of Stuart, a merchandising firm: STUART COMPANY Income Statement For the Year Ended December 31 Sales revenue (5,500 units * $163) Cont of goods sold (5,500 units * $85) Gross margin Sales commissions (108 of sales) Administrative salaries expense Advertising expense Depreciation expense Shipping and handling expenses (5,500 units X $2) Net income $ 896,500 (467,500 429,000 (89,650) (85,000) (39,000) (44,000) (11,000 $ 160,350 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 Stuart will earn if sales increase by 20 percent. Req A Req B and C Reconstruct the income statement using the contribution margin STUART COMPANY Income Statement For the Year Ended December 31 Less: Variable costs 0 Less: Fixed costs $ 0