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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 $ 96,000 38,400 57,600 45,120 $ 12,480 Percent of Sales 100% 40% 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 6% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales.

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 $ 96,000 38,400 57,600 45,120 $ 12,480 Percent of Sales 100% 40% 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 6% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales.

FINANCIAL ACCOUNTING
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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Please help me answer the remaining parts of Requirements 1 through 3.

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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 $ 96,000 38,400 57,600 45,120 $ 12,480 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 6% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. Percent of Sales 100% 40% 60% Net operating income Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using the degree of operating leverage, estimate the impact on net operating income of a 6% increase in unit 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).) increases X Answer is not complete. by < Required 1 % Required 3 >
Transcribed Image Text: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 $ 96,000 38,400 57,600 45,120 $ 12,480 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 6% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. Percent of Sales 100% 40% 60% Net operating income Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using the degree of operating leverage, estimate the impact on net operating income of a 6% increase in unit 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).) increases X Answer is not complete. by < Required 1 % Required 3 >
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 $ 96,000 38,400 57,600 45, 120 $ 12,480 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 6% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. Required 1 Required 2 Required 3 Sales Variable expenses Contribution margin Complete this question by entering your answers in the tabs below. Percent of Sales Fixed expenses Net operating income 100% 40% 60% Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. Engberg Company Contribution Income Statement Amount 3** ** ✓ $ > Answer is not complete. 0 0 x X X Percent of Sales < Required 2 0 X% X% % Required 3 >
Transcribed Image Text: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 $ 96,000 38,400 57,600 45, 120 $ 12,480 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 6% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. Required 1 Required 2 Required 3 Sales Variable expenses Contribution margin Complete this question by entering your answers in the tabs below. Percent of Sales Fixed expenses Net operating income 100% 40% 60% Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. Engberg Company Contribution Income Statement Amount 3** ** ✓ $ > Answer is not complete. 0 0 x X X Percent of Sales < Required 2 0 X% X% % Required 3 >
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