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 Amount Sales Sales Variable expenses Fixed expenses $ 137,000 100% 54,800 40% Contribution margin 82,200 60% 24,000 Net operating income $ 58,200 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 24% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 24% 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 24% increase in unit sales. Engberg Company Contribution Income Statement Amount Percent of Sales Sales Variable expenses Contribution margin $ 169,880 % 67,952 % 101,928 0% Fixed expenses 24,000 Net operating income $ 77,928