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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 Sales 1001 40 601 Amount

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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 Sales 1001 40 601 Amount $ 125,000 50,000 75,000 16,000 $ 59,000 Sales Variable expenses Contribution margin Pixed 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 19% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 19% increase in unit sales

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