The following income statement was drawn from the records of Joel Company, a merchandising firm. Sales...

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The following income statement was drawn from the records of Joel Company, a merchandising firm. Sales revenue (2,000 units x $125) Cost of goods sold (2,000 units x $65) Gross margin Sales commissions (10% of sales) Administrative salaries expense Advertising expense Depreciation expense Shipping and handling expenses (2,000 units x $1.00) Net income Required JOEL COMPANY Income Statement For the Year Ended December 31 Req A 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 Joel will earn if sales increase by 10 percent. Req B and C $ 250,000 (130,000) Complete this question by entering your answers in the tabs below. 120,000 (25,000) (30,000) (20,000) (24,000) (2,000) JOEL COMPANY Income Statement For the Year Ended December 31 Less: Variable costs $ 19,000 Reconstruct the income statement using the contribution margin format. < Prev 7 of 11 Next > The following income statement was drawn from the records of Joel Company, a merchandising firm. Sales revenue (2,000 units x $125) Cost of goods sold (2,000 units x $65) Gross margin Sales commissions (10% of sales) Administrative salaries expense Advertising expense Depreciation expense Shipping and handling expenses (2,000 units x $1.00) Net income Required JOEL COMPANY Income Statement For the Year Ended December 31 Req A 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 Joel will earn if sales increase by 10 percent. Req B and C $ 250,000 (130,000) Complete this question by entering your answers in the tabs below. 120,000 (25,000) (30,000) (20,000) (24,000) (2,000) JOEL COMPANY Income Statement For the Year Ended December 31 Less: Variable costs $ 19,000 Reconstruct the income statement using the contribution margin format. < Prev 7 of 11 Next >

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SOLUTION Reconstructing the income statement using the contribution margin format JOEL COMPANY Income Statement For the Year Ended December 31 Sales revenue 250000 Less Variable costs Cost of goods so... View the full answer