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1. 2. Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of Sales 100% 40
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Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of Sales 100% 40 Amount $ 127,000 50,800 76,200 23,000 $ 53,200 Sales Variable expenses Contribution margin Fixed expenses Net operating income 60% Required: 1. What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 29% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 29% increase in unit sales. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage Required 1 Required 2 > Required 1 Required 2 Required 3 Using the degree of operating leverage, estimate the impact on net operating income of a 29% increase in unit sales. (Round your intermediate calculations to 2 decimal places. Round your percentage answer to 2 decimal places (i.e.1234 should be entered as 12.34).) Net operating income by % Required 1 Required 2 Required 3 Construct a new contribution format income statement for the company assuming a 29% increase in unit sales. Engberg Company Contribution Income Statement Amount Percent of Sales % % 0 0 % $ 0 Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: Sales Variable expenses Contribution margin Fixed expenses Net operating income Claimjumper $ 98,000 30,400 $ 67,600 Makeover $ 49,000 6,350 $ 42,650 Total $ 147,000 36,750 110,250 84,825 $ 25,425 Required: 1. What is the overall contribution margin (CM) ratio for the company? 2. What is the company's overall break-even point in dollar sales? 3. Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the company's overall break-even point in dollar sales? (Do not round intermediate calculations.) Overall break-even point Required 1 Required 2 Required 3 Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products. (Do not round intermediate calculations. Round your answers to the nearest dollar amount.) Lucido Products Contribution Income Statement Claimjumper Makeover Total Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss)Step by Step Solution
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