Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of Sales 100% 40% Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount $ 130,000 52,000 78,000 18,000 $ 60,000 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 26% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 26% increase in unit 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: Percent of Sales 100% 40% Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount $ 130,000 52,000 78,000 18,000 $ 60,000 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 26% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 26% increase in unit 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 26% increase in unit sales. (Round your intermediate calculations to 2 decimal places. Round your percentage answer to 2 decimal places (i.e .1234 should be entered as 12.34).) Net operating income by % 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 $ 130,000 52,000 78,000 18,000 $ 60,000 Percent of Sales 100% 40% 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 26% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 26% increase in unit 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 26% increase in unit sales. Engberg Company Contribution Income Statement Amount Percent of Sales % % %
