Sales Variable expenses Contribution margin Fixed expenses Net operating income Required: Amount $ 86,000 Percent of...

  

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Sales Variable expenses Contribution margin Fixed expenses Net operating income Required: Amount $ 86,000 Percent of Sales 100% 34,400 40% 51,600 60% 41,280 $ 10,320 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 6% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. Engberg Company Contribution Income Statement Amount Percent of Sales % % % Sales Variable expenses Contribution margin Fixed expenses Net operating income Required: Amount $ 86,000 Percent of Sales 100% 34,400 40% 51,600 60% 41,280 $ 10,320 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 6% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. Engberg Company Contribution Income Statement Amount Percent of Sales % % %