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

Required:

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

2. Using the degree of operating leverage, estimate the impact on net operating income of a 11% increase in 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).)

3. Construct a new contribution format income statement for the company assuming a 11% increase in sales.

Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Amount $148,000 59,200 Percent of Sales 100% Sales Variable expenses 60% Contribution margin Fixed expenses 88,800 18,000 Net operating income $ 70,800 Required 1. Compute the company's degree of operating leverage. (Round your answer to 2 decimal places.) gree of operating leverage 2, using the degree of operating leverage, estimate the impact on net operating income of a 11% increase in 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).) et operating income