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Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed

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Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Amount $ 82,000 Percent of Sales 32,800 100% 40% 49,200 60% 37,720 Net operating income $ 11,480 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 6% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required s Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. Engberg Company Contribution Income Statement Sales Variable expenses Contribution margin Amount Percent of Sales $ 86,920 100 % 34,768 40 % 52,152 60% 37.720

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