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: Sales Variable expenses Contribution margin Fixed expenses Net operating income Required: Percent of Amount $127,000 Sales 50,800 100% 40 76,200 60% 22,000 $ 54,200 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 20% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 20% increase in unit sales. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage Using the degree of operating leverage, estimate the impact on net operating income of a 20% increase in unit 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 % Construct a new contribution format income statement for the company assuming a 20% increase in unit sales. Engberg Company Contribution Income Statement Amount Percent of Sales % % %