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 $ 148,000 59,200 88,800 17,000 $ 71,800 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 27% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 27% increase in sales