Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Amount Percent of Sales Variable expenses Contribution margin Fixed expenses Net operating income Sales $ 122,000 100% 48,800 40% 73,200 60% 23,000 $ 50,200 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 27% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 27% increase in sales.