Answer Happy

Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of Sales 100% 40% 6.0% Amount $ 124,000 49,600 74,400 Fixed expenses 21,000 Net operating income $ 53,400 Sales Variable expenses Contribution margin 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.

Requieu. 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. Answer is not complete. 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 Sales Variable expenses Contribution margin Fixed expenses ●● ✔ O 159,960 63,984 95,976 21,000 $ 74,976 Percent of Sales < Required 2 100 % 40 % 60 %

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. Answer is not complete. 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 24% increase in unit sales. (Round your intermediate calculations to 2 decimal places. Round your percentage answer to 2 decimal places (.e.1234 should be entered as 12.34).) Net operating income increases by 40.31 < Required 1 Required 3 >