Exercise 5-9 (Static) 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 100% 40% 60% Amount $ 80,000 32,000 48,000 38,000 $ 10,000 Sales Variable expenses Contribution margin Fixed expenses Net operating income 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 5% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 5% 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 1 decimal place.) Degree of operating leverage 4.8 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using the degree of operating leverage, estimate the impact on net operating income of a 5% increase in unit sales. (Do not round intermediate calculations.) Net operating income increases by 24 % Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Construct a new contribution format income statement for the company assuming a 5% increase in unit sales. Engberg Company Contribution Income Statement Amount Percent of Sales Sales $ % 159,960 63,984 95,976 Variable expenses Contribution margin % 0 % Fixed expenses 21,000 74,976 Net operating income $