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

	Amount			Percent of Sales
Sales	$	133,000		100	%
Variable expenses		53,200		40	%
Contribution margin		79,800		60	%
Fixed expenses		22,000
Net operating income	$	57,800

Required:

1. What is the companys degree of operating leverage?

2. Using the degree of operating leverage, estimate the impact on net operating income of a 26% increase in sales.

3. Construct a new contribution format income statement for the company assuming a 26% increase in sales.

Complete this question by entering your answers in the tabs below Required 1Required 2 Required 3 What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage