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Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement foll- Percent of Sales 100% 40 60% Sales Variable expenses Contribution margin Fixed expenses Net operating income i Amount $ 84,000 33,600 50,400 40,320 $ 10,080 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 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 anection bu

Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement foll- Percent of Sales 100% 40 60% Sales Variable expenses Contribution margin Fixed expenses Net operating income i Amount $ 84,000 33,600 50,400 40,320 $ 10,080 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 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 anection bu

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follow Percent of Sales 100% 40 60% Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount $ 84,000 33,600 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 5% increase in unit sales. 3. Construct a new contribution format Income statement for the company assuming a 5% increase in unit sales. Required 1 50,400 40,320 $ 10,000 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.) Degree of operating leverage Required: Required 2 1
Transcribed Image Text:Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follow Percent of Sales 100% 40 60% Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount $ 84,000 33,600 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 5% increase in unit sales. 3. Construct a new contribution format Income statement for the company assuming a 5% increase in unit sales. Required 1 50,400 40,320 $ 10,000 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.) Degree of operating leverage Required: Required 2 1
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% Sales Variable expenses Contribution margin Fixed expenses Net operating income 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 5% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 5% increase in unit sales. Amount $ 84,000 33,600 50,400 Complete this question by entering your answers in the tabs below. Required 1 40,320 $ 10,080 Required Required 2 Using the degree of operating leverage, estimate the impact on net operating income of a 5% increase in unit sales. (Round your intermediate calculations to 2 decimal places. Round your percentage answer to 2 decimal places (1.e.1234 should be entered as 12.34).) Net operating income Required 3 Fixed expenses Net operating income 40,320 $ 10,080 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 5% increa 3. Construct a new contribution format income statement for the company assuming a 5% increase in L Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Construct a new contribution format income statement for the company assuming a 5% increase in unit sa Engberg Company Contribution Income Statement Amount Percent of Sales % % %
Transcribed Image Text: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% Sales Variable expenses Contribution margin Fixed expenses Net operating income 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 5% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 5% increase in unit sales. Amount $ 84,000 33,600 50,400 Complete this question by entering your answers in the tabs below. Required 1 40,320 $ 10,080 Required Required 2 Using the degree of operating leverage, estimate the impact on net operating income of a 5% increase in unit sales. (Round your intermediate calculations to 2 decimal places. Round your percentage answer to 2 decimal places (1.e.1234 should be entered as 12.34).) Net operating income Required 3 Fixed expenses Net operating income 40,320 $ 10,080 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 5% increa 3. Construct a new contribution format income statement for the company assuming a 5% increase in L Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Construct a new contribution format income statement for the company assuming a 5% increase in unit sa Engberg Company Contribution Income Statement Amount Percent of Sales % % %
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