Engberg Company installs grass in the backyards of houses. The company's most recent monthly contribution income statement is as follows:

		Amount	percent of sales
Sales	ps	148.000	100%
Variable expends		59,200	40%
Contribution margin		88,800	60%
Fixed costs		15,000
operating margin	ps	73,800

Required:
1.	Calculate the degree of operating leverage of the company. (Round your answer to 2 decimal places.)

2.	Using the degree of operating leverage, estimate the impact on net operating income of an 18% increase in sales. (Round your intermediate calculations to 2 decimal places. Round your percent answer to 2 decimal places (that is, .1234 should be entered as 12.34.)

3.	Construct a new contribution format income statement for the company assuming an 18% increase in sales.

Answer rating: 100% (QA)

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