The following income statement was drawn from the records of Rundle Company, a merchandising firm: RUNDLE COMPANY Income Statement For the Year Ended December 31, Year 1 Sales revenue (6,000 units × $162) $ 972,000 Cost of goods sold (6,000 units × $81) (486,000 ) Gross margin 486,000 Sales commissions (10% of sales) (97,200 ) Administrative salaries expense (83,000 ) Advertising expense (37,000 ) Depreciation expense (42,000 ) Shipping and handling expenses (6,000 units × $2) (12,000 ) Net income $ 214,800 Required Reconstruct the income statement using the contribution margin format. Calculate the magnitude of operating leverage. Use the measure of operating leverage to determine the amount of net income Rundle will earn if sales increase by 20 percent.

Mountain mouse makes freeze-dried meals for hikers. one of mountain mouse's biggest customers is a sporting goods superstore. every 66 days, mountain mouse checks the inventory level at the superstore and places an order to restock the meals. these meals are delivered by ups in 55 days. average demand during the reorder period and order lead time is 8585 meals, and the standard deviation of demand during this same time period is about 1919 meals.calculate the restocking level for mountain mouse. assume that the superstore wants a 95\% service level. what happens to the restocking level if the superstore wants a higher level of service-say, 99]%? the restocking level for the 95% service level is 117 mealssuppose there are 25 meals in the superstore when mountain mouse checks inventory levels. how many meals should be ordered, assuming a 95% service level?