(2).

Exercise 11-15 Using contribution margin format income statement to measure the magnitude of operating leverage LO 11-3, 11-4 The following income statement was drawn from the records of Butler Company, a merchandising firm: BUTLER COMPANY Income Statement For the Year Ended December 31, 2014 Sales revenue (6,500 units x $169) $1,098,500 Cost of goods sold (6,500 units x $89) (578,500) 520,000 Gross margin (54,925) Sales commissions (5% of sales) (87,000) Administrative salaries expense Advertising expense 35,000 Depreciation expense 45,000 Shipping and handling expenses (6,500 units x $5 32,500 Net income 265,575