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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 143,000 100%
Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of Amount Sales Sales 143,000 100% Variable expenses 57, 200 40 Contribution margin 85 , 800 60% Fixed expenses 17,000 Net operating income $ 68, 800 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 28% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 28% increase in unit sales
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