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 Fanning, a merchandising firme FANNING COMPANY Incone Statement For the Year Ended December 31 Sales revenue (7.000 units X $167) Cost of goods sold (7,000 units X 51s) Gross margin Sales commissions (10% of sales) Administrative salaries expense Advertising expense Depreciation expense Shipping and handling expenses (7.000 units x 53) Net Income $1,169,000 (616,000 553,000 (116,900 (84,000) (31,000) (49,000 (21,000) $ 251,100 Required 6. 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 Fanning will earn if sales increase by 20 percent. 7 Reg Reg i and c Reconstruct the income statement using the contribution margin format 9.09 points FANNING COMINY Income Statement For the Year Ended Dec 31 ebook Les Variable conts A Print References Less Fixed costs Reg Band C > Complete this question by entering your answers in the tabs below. Req A Red Band Calculate the magnitude of operating leverage. Use the measure of operating leverage to determine the amount of net income Fanning will earn if sales increase by 20 percent. (Round your intermediate calculations and Operating leverage answer to 2 decimal places. Round the "Not Income" value to nearest whole dollar) b Operating leverage Net Income c.