Engberg company installs lawn sod in home yards

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Reference no: EM13925712

Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows:

Amount Percent of Sales

Sales $ 121,000 100%
Variable expenses 48,400 40%
Contribution margin 72,600 60%
Fixed expenses 19,000
Net operating income $ 53,600

1.Compute the company's degree of operating leverage. (Round your answer to 2 decimal places.)

2.Using the degree of operating leverage, estimate the impact on net operating income of a 22% 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).)

3.Construct a new contribution format income statement for the company assuming a 22% increase in sales.

Reference no: EM13925712

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