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Please answer within 30minutes Engberg Company installs lawn sod in home yards. The companys most...

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Accounting

Please answer within 30minutes

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

Amount Percent of Sales
Sales $ 122,000 100%
Variable expenses 48,800 40
Contribution margin 73,200 60%
Fixed expenses 21,000
Net operating income $ 52,200

1. What is the companys degree of operating leverage?

2. Using the degree of operating leverage, estimate the impact on net operating income of a 15% increase in unit sales.

3. Construct a new contribution format income statement for the company assuming a 15% increase in unit sales.

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