Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format...
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Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of Sales 100% 40% Amount $ 135,000 54,000 81,000 21,000 $ 60,000 Sales Variable expenses Contribution margin Fixed expenses Net operating income 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 20% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 20% increase in unit sales
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