Exercise 6-9 Compute and Use the Degree of Operating Leverage (L06-8] Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of Sales 100% 40% Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount $ 139,000 55,600 83,400 20,000 $ 63,400 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 13% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 13% increase in sales. Required 1 Required 2 Required 3 Construct a new contribution format income statement for the company assuming a 13% increase in sales. Engberg Company Contribution Income Statement Amount Percent of Sales % % O 0 $ 0