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 Franklin Company, a merchandising firm: TRANKLIN COMPANY Income Statement Tor the Year Ended December 31, 2018 Sales revenue 16,000 units * $168) Cost of goods sold 6.000 units $87) Gross margin Sales comissions (50 of sales) Administrative salaries expense Advertising expense Depreciation expense Shipping and handling expenses (6,000 units $1,000,000 (522,000) 486.000 (50, 400) (86,000) (37.000) (50,000) (6,000) Net Income $ 256.600 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 Franklin will earn if sales increase by 20 percent. Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Reg A Req B and C Reconstruct the income statement using the contribution margin format. FRANKLIN COMPANY Income Statement For the Year Ended December 31, 2018 Less: Variable costs Less: Fixed costs . 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 Franklin will earn If sales increase by 20 percen Complete this question by entering your answers in the tabs below. Reg A Reg B and C Calculate the magnitude of operating leverage. Use the measure of operating leverage to determine the amount of net income Franklin will earn if sales increase by 20 percent. (Round "Operating leverage" to 2 decimal places and round "Net Income" answer to nearest whole dollar.) times b. Operating leverage c. Net income ( ReqA