Exercise 5-9 Compute and Use the Degree of Operating Leverage [LO5-8]

part 1 of question

part 2 of question

part 3 of question

drip down options on left side of income statement are :

- Administrative Expenses

- Advertising

- Beginning Merchandise Inventory

- Commissions

- Cost of Goods Sold

- Depreciation

- Direct Labor

- Direct Materials

- Ending Merchandise Inventory

- Fixed Expenses

-Indirect Labor

- Indirect Materials

- Purchases

- Sales

- Selling Expenses

- Variable Expenses

better picture IS

Exercise 5-9 Compute and Use the Degree of Operating Leverage [LO5-8] Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statemer Percent of Sales 100% 40% 60% Amount $ 126,000 50,400 75,600 23,000 $ 52,600 Sales Variable expenses Contribution margin Fixed expenses Net operating income 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 15% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 15% increase in sales. 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 15% Increase in sales. (Round your intermediate calculations to 2 decimal places. Round your percentage answer to 2 decimal places (i.e.1234 should be entered as 12.34).) Net operating income 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 15% increase in sales, 3. Construct a new contribution format income statement for the company assuming a 15% increase in sales. 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 15% increase in sales. Engberg Company Contribution Income Statement Amount Percent of Sales 0 % S 0