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

Amount Percent of Sales

Sales $ $82,000100\%$

Variable expenses $32,80040$

Contribution margin $49,20060\%$

Fixed expenses $38,540$

Net operating income $ $10,660$

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 $8\%$ increase in unit sales.

$3.$ Construct a new contribution format income statement for the company assuming a $8\%$ increase in unit sales.Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows:

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 $8\%$ increase in unit sales.

Construct a new contribution format income statement for the company assuming a $8\%$ increase in unit sales.

Complete this question by entering your answers in the tabs below.

What is the company's degree of operating leverage? $($Round your answer to $2$ decimal places.$)$

Degree of operating leverage

Required $1$

Using the degree of operating leverage, estimate the impact on net operating income of a $8\%$ 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 $12\mathrm{.}34).)$

Required $1$

Construct a new contribution format income statement for the company assuming a $8\%$ increase in unit sales.