Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount $ 82,000 32,800 49,200 37,720 $ 11,480 Percent of Sales 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 7% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 7% increase in unit sales.

Engberg Company Contribution Income Statement \begin{tabular}{|l|l|l|l|} \hline & Amount & \multicolumn{2}{|c|}{ Percent of Sales } \\ \hline & & & % \\ \hline & & & % \\ \hline & & & % \\ \hline & & \\ \hline \end{tabular} Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: 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 7% increase in unit sales 3. Construct a new contribution format income statement for the company assuming a 7% increase in unit sales Required: 1. What is the company's margin of safety? Note: Do not round intermediate calculations. 2. What is the company's margin of safety as a percentage of its sales? Note: Round your percentage answer to 2 decimal places (i.e. .1234 should be entered as 12.34)