At least 2 decimal places for question 2.

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 Amount $ 125,000 50,000 75,000 23,000 $ 52,000 Percent of Sales 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 20% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 20% increase in sales