Engberg Company installs lawn sod in home yards. The companys most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 123,000 100 % Variable expenses 49,200 40 % Contribution margin 73,800 60 % Fixed expenses 19,000 Net operating income $ 54,800 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 12% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 12% increase in sales.