Eneliko Company installs home theater systems. The companys most recent monthly contribution format income statement appears below:

	Amount		Percent of Sales
Sales	$	134,000	100%
Variable expenses		53,600	40%
Contribution margin		80,400	60%
Fixed expenses		24,000
Net operating income	$	56,400

Required:
1.	Compute the companys degree of operating leverage. (Round your answer to 2 decimal places.)

Degree of operating leverage

2.	Using the degree of operating leverage, estimate the impact on net operating income of a 17% increase in sales. (Input the amount as a positive value. Round your intermediate calculations and final answers to 2 decimal places.)

Net operating income (Click to select)increasesdecreases by

%

3.	Construct a new contribution format income statement for the company assuming a 17% increase in sales. (Input all amounts as positive values except losses which should be indicated by a minus sign.)

Contribution Income Statement
	Total
(Click to select)Fixed expensesSalesContribution marginVariable expensesNet operating income (loss)	$
(Click to select)Contribution marginSalesNet operating income (loss)Fixed expensesVariable expenses
(Click to select)Contribution marginSalesFixed expensesVariable expensesNet operating income (loss)
(Click to select)Fixed expensesVariable expensesNet operating income (loss)SalesContribution margin
(Click to select)SalesNet operating income (loss)Contribution marginVariable expensesFixed expenses	$