Engberg Company installs lawn sod in home yards. The companys most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 150,000 100 % Variable expenses 60,000 40 % Contribution margin 90,000 60 % Fixed expenses 17,000 Net operating income $ 73,000 Required: 1. What is the companys degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 22% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 22% increase in unit sales.

Required 1 Required 2 Required 3 What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage Remuired Required 2 Required 1 Required 2 Required 3 Using the degree of operating leverage, estimate the impact on net operating income of a 22% 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 12.34).) Net operating income by % Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Construct a new contribution format income statement for the company assuming a 22% increase in unit sales. Engberg Company Contribution Income Statement Amount Percent of Sales % % %