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

Amount Percent of Sales Sales $ 121,000 100% Variable expenses 48,400 40% Contribution margin 72,600 60% Fixed expenses 19,000 Net operating income $ 53,600

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 22% 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 22% increase in sales.