Engberg Company installs lawn sod in home yards. The companys most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 141,000 100% Variable expenses 56,400 40% Contribution margin 84,600 60% Fixed expenses 21,000 Net operating income $ 63,600 Required: 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 21% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 21% increase in unit sales.

Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: 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 21% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 21% increase in unit sales. What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) Using the degree of operating leverage, estimate the impact on net operating income of a 21% 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).) Construct a new contribution format income statement for the company assuming a 21% increase in unit sales