Exercise 5-9 (Algo) Compute and Use the Degree of Operating Leverage [LO5-8] Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of Sales Variable expenses Contribution margin Fixed expenses Net operating income. Required: Amount $ 122,000 48,800 73,200 Sales 100% 40 60% 18,000 $ 55,200 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 10% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 10% increase in unit sales