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Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Pixed expenses
Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Pixed expenses Net operating income Amount $ 136,000 54,400 81,600 24,000 $ 57,600 Percent of Sales 1008 40 601 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 16% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 16% 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 16% increase in unit sales, Engberg Company Contribution Income Statement Amount $ 217,600 Sales Percent of Sales 100% Required 1 Required 2 Required 3 Construct a new contribution format income statement for the company assuming a 16% increase in unit sales. Engberg Company Contribution Income Statement Amount Sales $ 217,600 Variable expenses 87,040 Contribution margin 130,560 Fixed expenses 24,000 Net operating income $ 106,560 Percent of Sales 100% 40% 60 %
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