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: Amount Percent of Sales $ 149,000 100% 59,600 40% 89,400 60% 24,000 $ 65,400 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 27% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 27% increase in unit sales.