Exercise 5-9 Compute and Use the Degree of Operating Leverage (L05-8) Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of Amount Sales Sales $ 126,000 1000 Variable expenses ..50.400 400 Contribution margin 75,600 608 Fixed expenses 15,000 Het operating income $ 60.600 es 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 29% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 29% increase in sales. Complete this question by entering your answers in the tabs below. Required: Required 2 Required 3 What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage o G Search or type URL R . % @ 2 $ 4 & 7 3 5 6 - 8 9 T R 2 W T Y U 0 S D F G H L Z V B N M CAILIDE D' Lumpur and use uie wegree viperunty Leverage (LUDO Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of Sales 1001 mount $ 126,000 50.400 75,600 15,000 $ 60,600 Sales Variable expenses Contribution margin Fixed expenses Het operating income 600 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 29% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 29% increase in sales. Complete this question by entering your answers in the tabs below Required 1 Required 2 Required 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 (le 1234 should be entered as 12.34):) Net operating con MacBook Pro c D G Search or type URL * 3 $ 4 % 5 2 3 6 7 8 9 0 W E R T 0 S D F G H J L > Z V B B N M . Command 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 29% increase in s 3. Construct a new contribution format income statement for the company assuming a 29% increase in sales. poed Complete this question by entering your answers in the tabs below. Book Required 1 Required 2 Required 3 Hint Construct a new contribution format income statement for the company assuming a 29% increase in sales. Print ferences Engberg Company Contribution Income Statement Amount Percent of Sales %6 % 0% 0 0 MacBook Pro C G Search or type URL # * @ 2 $ 4 % 5 3 6 & 7 C 9 8 W E R T Y U A S D F G H . J
