Exercise 6-9 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 2:47.06 Percent of Sales 1009 400 600 Amount $ 129,000 51,600 77,400 16,000 $ 61,400 poed Book 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 29% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 29% increase in sales. Print erences Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating loverage (Required Required 2 > 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 Amount $ 129,000 51,600 77,400 16,000 $ 61,400 Percent of Sales 1008 408 604 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 29% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 29% increase in sales. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using the degree of operating leverage, estimate the impact on net operating income of a 29% increase in sales. (Do not round intermediate calculations, Round your percentage answer to 2 decimal places (i.e 0.1234 should be entered as 12.34).) Net operating income by Percent of Sales 1008 408 608 Amount $ 129,000 51,600 77,400 16,000 $ 61,400 Sales Variable expenses Contribution margin Fixed expenses Net operating income 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 29% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 29% increase in 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 29% increase in sales. Engberg Company Contribution Income Statement Amount Percent of Sales % % 0 0 % $ 0
