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

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The following income statement was drawn from the records of Munoz Company, a merchandising firm: MUNOZ COMPANY Income Statement For the Year Ended December 31, Year 1 Sales revenue (5,000 units x $162) $810,000 Cost of goods sold (5,000 units x $88) (440,000) Gross margin 370,000 Sales commissions (10% of sales) (81,000) Administrative salaries expense (87,000) Advertising expense (33,000) Depreciation expense Net income (45,000) Shipping and handling expenses (5,000 units x $2) (10,000) $114,000 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 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. Note: Round your intermediate calculations and "Operating leverage" answer to 2 decimal places. Round the "Net income" value to nearest whole dollar, b. Operating leverage C. Net income Show less The following income statement was drawn from the records of Munoz Company, a merchandising firm: MUNOZ COMPANY Income Statement For the Year Ended December 31, Year 1 Sales revenue (5,000 units x $162) $810,000 Cost of goods sold (5,000 units x $88) (440,000) Gross margin 370,000 Sales commissions (10% of sales) (81,000) Administrative salaries expense (87,000) Advertising expense (33,000) Depreciation expense Net income (45,000) Shipping and handling expenses (5,000 units x $2) (10,000) $114,000 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 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. Note: Round your intermediate calculations and "Operating leverage" answer to 2 decimal places. Round the "Net income" value to nearest whole dollar, b. Operating leverage C. Net income Show less