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: Percent of Sales Variable expenses Contribution margin Fixed expenses Amount $ 88,000 Sales 100% 35,200 40% 52,800 60% 40,480 Net operating income $ 12,320 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 6% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales.