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Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses

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Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount $ 142,000 56,800 85,200 17,000 $ 68,200 Percent of Sales 100% 408 60% 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 22% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 22% increase in sales. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount $ 142,000 56,800 85,200 17,000 $ 68,200 Percent of Sales 100% 408 60% 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 22% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 22% increase in sales. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using the degree of operating leverage, estimate the impact on net operating income of a 22% increase in sales. (Do not round intermediate calculations. Round your percentage answer to 2 decimal places (i.e 0.1234 should be entered as 12.34).) Net operating income increases by % Percent of Sales 1008 40% 60% Amount $ 142,000 56,800 85,200 17,000 $ 68,200 Sales Variable expenses Contribution margin Fixed expenses Net operating income 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 22% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 22% increase in sales. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Construct a new contribution format income statement for the company assuming a 22% increase in sales. Engberg Company Contribution Income Statement Amount Sales Variable expenses Contribution margin Percent of Sales % % 0 % 0 Fixed expenses Net operating income $ 0

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