Amount Percent of Sales

Sales $ $94,000100\%$

Variable expenses $37,60040\%$

Contribution margin $56,40060\%$

Fixed expenses $45,120$

Net operating income $ $11,280$

Required:

What is the company$$s degree of operating leverage?

Using the degree of operating leverage, estimate the impact on net operating income of a $6\%$ increase in unit sales.

Construct a new contribution format income statement for the company assuming a $6\%$ increase in unit sales.