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: Percent of Sales 100% 408 608 Amount $ 139,000 55,600 83,400 23,000 $ 60,400 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 14% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 14% increase in sales. X Answer is not complete. 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 1.38 Required 1 Required 2 > Required 1 Required 2 Required 3 Using the degree of operating leverage, estimate the impact o intermediate calculations to 2 decimal places. Round your perc as 12.34).) Net operating income increases by 19.33 %