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

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 12% increase in unit sales.

3. Construct a new contribution format income statement for the company assuming a 12% increase in unit sales.

Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of Sales Amount Sales 100% $ 121,000 48,400 40% Variable expenses Contribution margin 72,600 60% Fixed expenses 23,000 Net operating income $ 49,600 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 12% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 12% increase in unit sales. Answer is not complete. Complete this question by entering your answers in the tabs below. 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 1.35 X Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using the degree of operating leverage, estimate the impact on net operating income of a 12% 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 increases by 29.70 X % Required 3 $ % % %