Answer Happy

Engberg Company's most recent monthly income statement is given below: Sales Less: Variable expenses Contribution margin Less: Fixed expenses Net income Degree of operating leverage Amount $ 96,000 57,600 38,400 28,000 $ 10,400 Required: 1. Compute the company's degree of operating leverage. (Round your answer to 2 decimal places.) 4 Percent change in net income Percentage of Sales % 100 60 40 2. Using the degree of operating leverage, estimate the impact on net income of a 10% increase in sales. (Do not round intermediate calculations. Round "Percentage" answer to 1 decimal place, (i.e., 0.123 should be considered as 12.3%).) %