Exercise $5-9($Algo$)$ Compute and Use the Degree of Operating Leverage $[$LO$5-8]$

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

Required:

What is the company's degree of operating leverage?

Using the degree of operating leverage, estimate the impact on net operating income of a $5\%$ increase in unit sales.

Construct a new contribution format income statement for the company assuming a $5\%$ increase in unit sales.

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Construct a new contribution format income statement for the company assuming a $5\%$ increase in unit sales.