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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 Amount Sales Sales $ 136,000

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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 Amount Sales Sales $ 136,000 100x Variable expenses 54,400 40% Contribution margin 81,600 60% Fixed expenses 25,000 Net operating income $ 56,600 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 15% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 15% 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 Required Required 2 > 40% 60% Variable expenses Contribution margin Fixed expenses Net operating income 54,400 81,600 25,000 $ 56,600 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 15% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 15% 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 15% increase in sales. (Round your Intermediate calculations to 2 decimal places. Round your percentage answer to 2 decimal places (1.e.1234 should be entered as 12.34).) Net operating income UUL Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 136,000 54,400 81,600 25,000 $ 56,600 DOL 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 15% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 15% 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 15% increase in sales. Engberg Company Contribution Income Statement Percent of Sales % % % Amount

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