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Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows Percent of Amount Sales $ 128,000 51,200

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Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows Percent of Amount Sales $ 128,000 51,200 Sales 100% 40% Variable expenses 60% Contribution margin 76,800 20,000 $ 56,800 Fixed expenses Net operating income 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 25% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 25% increase in sales Complete this question by entering your answers in the tabs belovw Required 1 Required 2Required 3 What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage Required 1 Required2> Required 1Required 2 Required 3 Using the degree of operating leverage, estimate the impact on net operating income of a 25% increase in sales. (Do not round intermediate calculations. Round your percentage answer to 2 decimal places (i.e 0.1234 should be entered as 12.34).) Net operating income by Required 1 Required 3 Required 1 Required 2 Required 3 Construct a new contribution format income statement for the company assuming a 25% increase in sales. Engberg Company Contribution Income Statement Amount Percent of Sales Required 2 Required 3

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