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Please answer within 30minutes Engberg Company installs lawn sod in home yards. The companys most recent monthly contribution format income statement follows: Amount Percent of
Please answer within 30minutes
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 | 21,000 | |
Net operating income | $ 52,200 |
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 15% increase in unit sales.
3. Construct a new contribution format income statement for the company assuming a 15% increase in unit sales.
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