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

Amount

Percent of Sales

Sales

$

139,000

100%

Variable expenses

55,600

40%

Contribution margin

83,400

60%

Fixed expenses

21,000

Net operating income

$

62,400

.

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 26% 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 26% increase in sales.