WALTON COMPANY Income Statement Por the Year Ended December 31 Sales revenue (5.500 units * $165) Cost of goods sold (5,500 units $85) Gross margin Sales commission (58 of sales) Administrative salaries expense Advertising expense Depreciation expense Shipping and handling expenses (5,500 units * $4) Net income $ 907.500 (467,500) 440.000 (45,375) (84,000) (38.000) (50,000) (22,000) $ 200,625 * 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 Walton will earn I sales increase by 20 percent. Complete this question by entering your answers in the tabs below. REGA Reg Band Reconstruct the income statement using the contribution margin format. WALTON COMPANY Income Statement For the Year Ended December 31 Less: Variable costs 0 Less: Found costs The following income statement was drawn from the records of Walton, a merchandising firm: WALTON COMPANY Income Statement For the Year Ended December 31 Sales revenue (5,500 units X 5165) Cost of goods sold (5,500 units * $85) Gross margin Sales comissions (5of wales) Administrative salaries expense Advertising expense Depreciation expense Shipping and handling expenses (5,500 units - 34) Net income $ 907,500 (462,500) 440,000 (45,375) (84.000) (38,000) (50,000) (22,000) $ 200,625 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 amo of net income Walton will earn if sales increase by 20 percent Complete this question by entering your answers in the tabs below. REGA Reg B and C Calculate the magnitude of operating leverage. Use the measure of operating leverage to determine the amount of net income Walton 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 c. Not income