Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next months budget appear below:

Selling price per unit	$	29
Variable expense per unit	$	13
Fixed expense per month	$	13,600
Unit sales per month		1,000

Required:

1. What is the companys margin of safety? (Do not round intermediate calculations.)

2. What is the companys margin of safety as a percentage of its sales? (Round your percentage answer to 2 decimal places (i.e. .1234 should be entered as 12.34).)

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Engberg Company installs lawn sod in home yards. The companys most recent monthly contribution format income statement follows:

	Amount			Percent of Sales
Sales	$	122,000		100	%
Variable expenses		48,800		40	%
Contribution margin		73,200		60	%
Fixed expenses		18,000
Net operating income	$	55,200

Required:

1. What is the companys degree of operating leverage?

2. Using the degree of operating leverage, estimate the impact on net operating income of a 19% increase in sales.

3. Construct a new contribution format income statement for the company assuming a 19% increase in sales.