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

Amount

Percent of Sales

Sales

$

124,000

100%

Variable expenses

49,600

40%

Contribution margin

74,400

60%

Fixed expenses

21,000

Net operating income

$

53,400

Required:1.

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

2.

Using the degree of operating leverage, estimate the impact on net operating income of a 29% 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 29% increase in sales.