Exercise 5-9 Compute and Use the Degree of Operating Leverage (L05-8] Engberg Company Installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of Amount Sales Sales $ 120,000 100% Variable expenses 48,000 40% Contribution margin 72,000 604 Fixed expenses 19,000 Net operating income $ 53,000 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 28% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 28% increase in sales. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage Required 2 > 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 statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount $ 120,000 48,000 72,000 19,000 $ 53,000 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 28% increase in sales. 3. Construct a new contribution format income statement for the company assuming o 28% 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 28% increase in 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).) Not operating income by % Percent of Sales 100 404 60% Amount $ 120,000 48,000 72,000 19.000 $ 53,000 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 28% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 28% 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 28% Increase in sales, Engberg Company Contribution Income Statement Amount Percent of Sales % %