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

	Amount	Percent of Sales
Sales	$127,000	100%
Variable Expenses	$50,800	40%
Contribution Margin	$76,200	60%
Fixed Expenses	$22,000
Net operating income	$54,200

1. Compute the companys degree of operating leverage. (Round your answer to 2 decimal places.)

2. Using the degree of operating leverage, estimate the impact on net operating income of a 16% increase in sales. (Round your intermediate calculations to 2 decimal places. Round your percentage answer to 2 decimal places (i.e .1234 should be entered as 12.34).)

Net Operating Income ________ by _________%.

3. Construct a new contribution format income statement for the company assuming a 16% increase in sales.