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 Amount $ 147,000 Percent of 58,800 Sales 100% 40% 88,200 60x 18,000 Net operating income $ 70,200 Fixed expenses 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 18% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 18% increase in unit sales.