**Engberg Company Contribution Format Income Statement**Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement is as follows:| **Category** | **Amount** | **Percent of Sales** ||-------------------------|------------|----------------------|| Sales | $86,000 | 100% || Variable expenses | $34,400 | 40% || Contribution margin | $51,600 | 60% || Fixed expenses | $41,280 | || Net operating income| $10,320 | |**Required Tasks:**1. **What is the company's degree of operating leverage?** - Calculate and understand how the degree of operating leverage reflects the company's fixed and variable cost structure.2. **Using the degree of operating leverage, estimate the impact on net operating income of an 8% increase in unit sales.** - Analyze how changes in sales volume affect the profitability due to the cost structure.3. **Construct a new contribution format income statement for the company assuming an 8% increase in unit sales.** - Project the new financial outcomes with the given increase in sales.**Response Submission:**- Users are to complete these analyses by entering their answers in the provided tabs.**Example Calculation:**- The degree of operating leverage is calculated as 4.29, indicating the sensitivity of the company's net operating income to changes in sales volume. Please ensure precise calculations and round off answers to two decimal places as required.

MARGINAL COSTING INCOME STATEMENT Marginal Costing Income Statement is One of the Important Cost…

Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of Sales 100% 40% 60% Amount $ 86,000 34,400 51,600 Fixed expenses 41,280 Net operating income $ 10,320 Sales Variable expenses Contribution margin 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 8% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 8% increase in unit sales. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage 4.29 Required 2

Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of Sales 100% 40% 60% Amount $ 86,000 34,400 51,600 Fixed expenses 41,280 Net operating income $ 10,320 Sales Variable expenses Contribution margin 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 8% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 8% increase in unit sales. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage 4.29 Required 2

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 86,000 100% Variable expenses 34,400 40% Contribution margin 51,600 60% Fixed expenses 40, 420 Net operating income $ 11,180 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 7% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 7% increase in unit sales.
Green Valley Corp.'s contribution format income statement for the most recent month follows: Sales $ 506,000 Variable expenses 236,500 Contribution margin 269,500 Fixed expenses 241,700 Net operating income $ 27,800 Required: a. Compute the degree of operating leverage to two decimal places. b. Using the degree of operating leverage, estimate the percentage change in net operating income that should result from a 3% increase in sales. c. If Green Valley’s competitor Black Mountain Inc. has a degree of operating leverage as 8, which company has the higher operating risk?
Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount $ 86,000 34,400 51,600 39,560 $ 12,040 Required: 1. What is the company's degree of operating leverage? Required 1 Percent of Sales 100% 40% 60% 2. Using the degree of operating leverage, estimate the impact on net operating income of a 5% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 5% increase in unit sales. Complete this question by entering your answers in the tabs below. Required 2 Required 3 What is the company's degree of operating leverage? (Round your answer to 2 decimal places.)
Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 130,000 100% Variable expenses 52,000 40% Contribution margin 78,000 60% Fixed expenses 20,000 Net operating income $ 58,000 Required: What is the company’s degree of operating leverage? Using the degree of operating leverage, estimate the impact on net operating income of a 25% increase in unit sales. (not able to upload a third image) but I need the correct answer to what is the "net operating income" Construct a new contribution format income statement for the company assuming a 25% increase in unit sales.
Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (8,400 units) Variable expenses Contribution margin Total $ 260,400 159,600 Per Unit $ 31.00 19.00 $ 12.00 100,800 Fixed expenses Net operating income 55,300 $ 45,500 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 90 units?
Seabold Interiors sold 18,400 yards of wallpaper last year at a contributionmargin of $3.50 per yard and incurred $49,400 in total fixed costs. This year, contribution margin per yard is expected to increase to $4, and fixed costs are expected to increase to $58,000. How many units must be sold this year to earn the same operating income as was earned last year? (Hint: Use the expanded contribution margin model described in this chapter.)a. 16,900.b. 17,500.c. 18,250.d. 20,200.e. None of the above.
Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (7,600 unita) Variable expenses Total $ 243,200 136, 800 Per Unit $32.00 18.00 Contribution nargin 106,400 $ 14.00 ried expenses 55,000 5 51,400 et operating Lncone Required: (Consider each case independently): 1 What would be the revised net operating income per month if the sales volume increases by 50 units? 2 What would be the revised net operating income per month if the sales volume decreases by 50 units? 3. What would be the revised net operating income per month if the sales volume is 6,600 units? 1. Revined net operating income 2. Revised net operating income 3. Revised net operating income
Suburban Landscape provides landscaping design and installation for residential and commercial properties. The company's recent annual contribution format income statement follows: Amount Percent of Sales Sales 123,000 100 Variable expenses 49,200 40 Contribution margin 73,800 60 % Fixed expenses 24,000 Net operating income 49,800 Required: 1. What is the company's degree of operating leverage? %24