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 Munoz Company, a merchandising firm: the Year Ended r 31, 2018 Sales revenue (7,500 units x $168) Cost of goods sold (7,500 units x $84) $1,260,000 630,000 630,000 (63,000) (82,000) (37,000) (47,000) Gross margin Sales commissions (5t of sales) Administrative salaries expense Shipping and handling expenses (7,500 units $5) (37,500) $ 363,500 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 Munoz will earn if sales increase by 10 percent. Complete this question by entering your answers in the tabs below Req A Req B and C the income statement using the contribution margin format. Req A Req B andc Reconstruct the income statement using the contribution mar MUNOZ COMPANY Income Statement For the Year Ended December 31, 2018 1,260,000 Sales revenue Less: Variable costs Cost of goods sold Sales commissions Shipping and handling expenses (630,000) (63,000) (37,500) Contribution margin Less: Fixed costs 529,500 Administrative salaries Advertising expense Depreciation expense Net income $ 529,500 Req A The following income statement was drawn from the records of Munoz Company, a merchandising firm: Income Statement Sales revenue (7,500 units $168) cost of goods sold (7,500 units x $84) Gross margin Sales commissions (5t of sales) $1,260,000 630,000) 630,000 63,000) (82,000) (37,000) (47,000) Advert Depreciation expense Shipping and handling expenses (7,500 units $5) ng expense ok (37,500) 363,500 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 Munoz will earn if sales increase by 10 percent. Complete this question by entering your answers in the tabs below. Req A Req B and C Calculate the magnitude of operating leverage. Use the measure of operating leverage to determine the amount of net income Munoz will earn if sales increase by 10 percent. (Round "Operating leverage" to 2 decimal places and round "Net income" answer to nearest whole dollar) C. Net income Next> 3 of 6 K Prev