Exercise 6-9 (Algo) Compute and Use the Degree of Operating Leverage [LO6-8] 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 Sales $ 145,000 100% 58,000 40% 87,000 60% 19,000 $ 68,000 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 22% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 22% increase in unit sales. 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 22% increase in unit sales. Engberg Company Contribution Income Statement Amount Percent of Sales Sales Variable expenses $ 184,150 % 73,660 % Contribution margin 110,490 0% Fixed expenses 19,000 Net operating income $ 91,490