Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follo Sales Variable expenses Contribution margin Fixed expenses Amount $ 86,000 Percent of Sales 100% 34,400 40% 51,600 60% 39,560 Net operating income $ 12,040 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 7% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 7% increase in unit sales. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required Required 3 Using the degree of operating leverage, estimate the impact on net operating income of a 7% increase in unit sales. (Round your intermediate calculations to 2 decimal places. Round your percentage answer to 2 decimal places (.e.1234 should be entered as 12.34).) Net operating income increases by 25.71% 3. Construct a new contribution format income statement for the company assuming a 7% increase in unit sale: Answer is complete but not entirely correct. 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 7% increase in unit sales. Engberg Company Contribution Income Statement Amount Percent of Sales Sales $91,160 100% Variable expenses 36,464 40 % Contribution margin 54,696 60 % Fixed expenses 39,560 Net operating income $ 15,136 Part 1 of 2 [The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below 1.36 points Mc Graw Selling price Percent Per Unit of Sales $75 100% Contribution margin $24 328 Variable expenses Fixed expenses are $75,000 per month and the company is selling 4,000 units per month. Exercise 6-5 (Algo) Part 1 Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,900, the monthly sales volume increases by 100 units, and the total monthly sales increase by $7,500? 1-b. Should the advertising budget be increased? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg 1A Req 10 How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,900, the monthly sales volume increases by 100 units, and the total monthly sales increase by $7,500? (Do not round intermediate calculations) Net operating incortie) decreases 2.000 O Req 18 > < Prev of 11 Next >