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Engberg Company Installs lawn sod in home yards. The company's most recent monthly contribution format Income statement follows: Percent of Amount Sales Sales Variable
Engberg Company Installs lawn sod in home yards. The company's most recent monthly contribution format Income statement follows: Percent of Amount Sales Sales Variable expenses $135,000 100 54,000 40% Contribution margin 01.000 600 Fixed expenses 10,000 Net operating income $63,000 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 10% increase in sales. 3. Construct a new contribution format Income statement for the company assuming a 10% increase in sales. Complete this question by entering your answers in the tabs below.
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