Exercise $2-13$A $($Algo$)$ Using contribution margin format income statement to measure the magnitude operating leverage LO $2-3,2-4$

The following income statement was drawn from the records of Solomon Company, a merchandising firm:

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 Solomon will earn if sales increase by $10$ percent.

Complete this question by entering your answers in the tabs below.

Req A

Req $B$ and $C$

b$.$ Calculate the magnitude of operating leverage.

c$.$ Use the measure of operating leverage to determine the amount of net income Solomon will earn if sales increase by $10$ percent.

Mote: Round your intermediate calculations and "Operating leverage" answer to $2$ decimal places, Round the "Net income" value to nearest whole dollar.

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b$.$ Operating leverage

c$.$ Net income