Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows:

Required:

What is the company's degree of operating leverage? $($Round to two decimal places.$)$

Using the degree of operating leverage, estimate the percentage increase in net operating income if there is a $27\%$ increase in unit

sales. $($Enter the percentage as a whole number with two decimal places, i$.$e$.,40\mathrm{.}25.)$

Construct a new contribution format income statement for the company assuming a $27\%$ increase in unit sales.

Complete this question by entering your answers in the tabs below.

What is the company's degree of operating leverage? $($Round your answer to $2$ decimal places.$)$Required information

$[$The following information applies to the questions displayed below.$]$

Data for Hermann Corporation are shown below:

Fixed expenses are $$72,000$ per month and the company is selling $4,200$ units per month.

$2-$a$.$ Refer to the data above. How much will net operating income increase $($decrease$)$ per month if the company uses higher$-$quality

components that increase the variable expense by $$4$ per unit and increase unit sales by $25\%.($See below for a hint if you are having

trouble getting to the right answer.$)$

$2-$b$.$ Should the higher$-$quality components be used?

Complete this question by entering your answers in the tabs below.

Req $2B$

Refer to the original data. How much will net operating income increase $($decrease$)$ per month if the company uses higher$-$

quality components that increase the variable expense by $$4$ per unit and increase unit sales by $25\%.$Required information

$[$The following information applies to the questions displayed below.$]$

Data for Hermann Corporation are shown below:

Fixed expenses are $$72,000$ per month and the company is selling $4,200$ units per month.

$2-$a$.$ Refer to the data above. How much will net operating income increase $($decrease$)$ per month if the company uses higher$-$quality

components that increase the variable expense by $$4$ per unit and increase unit sales by $25\%.($See below for a hint if you are having

trouble getting to the right answer.$)$

$2-$b$.$ Should the higher$-$quality components be used?

Complete this question by entering your answers in the tabs below.

Req $2B$

Refer to the original data. How much will net operating income increase $($decrease$)$ per month if the company uses higher$-$

quality components that increase the variable expense by $$4$ per unit and increase unit sales by $25\%.$