Exercise 11-15A (Algo) 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 Zachary, a merchandising firem LACHARY COMPANY Income Statement For the Year Ended December 31 Sales revenue (6,000 units $169) $1,014,000 Cost of goods sold (6,000 units $12) (492.000 Crossargin 522,000 sales commissione con of inten) (101,400) Administrative salaries expense (02,000) Advertising expense (36,000) Depreciation expense (43,000) Shipping and handling expenso (6.000 unite 33 (10,000) Set income $ 201,600 Required . 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 Zachary 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. Red A Reg Band Reconstruct the income statement using the contribution margin format. ZACHARY COMPANY Income Statement For the Year Ended December 31 Less: Variable costs Loss 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 Zachary will earn if sales increase by 20 percent. Complete this question by entering your answers in the tabs below. REGA Reg Band Calculate the magnitude of operating leverage. Use the measure of operating leverage to determine the amount of net income Zachary 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 Net Income