Engberg Company installs lawn sod in home yards. The company$$s most recent monthly contribution format income statement follows:

Amount Percent of Sales

Sales $ $94,000100\%$

Variable expenses $37,60040\%$

Contribution margin $56,40060\%$

Fixed expenses $44,180$

Net operating income $ $12,220$

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 $6\%$ increase in unit sales.

$3.$ Construct a new contribution format income statement for the company assuming a $6\%$ increase in unit sales.