ingberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of Sales 100% 40 Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount $ 84,000 33,600 50,400 39,480 $ 10,920 68% equired: What is the company's degree of operating leverage? Using the degree of operating leverage, estimate the impact on net operating income of a 6% increase in unit sales. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. 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
ingberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Percent of Sales 100% 40 Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount $ 84,000 33,600 50,400 39,480 $ 10,920 68% equired: What is the company's degree of operating leverage? Using the degree of operating leverage, estimate the impact on net operating income of a 6% increase in unit sales. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. 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
Chapter1: Financial Statements And Business Decisions
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![Exercise 5-9 (Algo) Compute and Use the Degree of Operating Leverage [LO5-8]
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
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 6% increase in unit sales.
3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales.
Required 2 Required 3
50,400
39,480
$ 10,920
Complete this question by entering your answers in the tabs below.
Required 1
What is the company's degree of operating leverage? (Round your answer to 2 decimal places.)
Degree of operating leverage](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fedf111bd-8104-414c-92c2-cbc9edca5ffc%2Feac15017-cc34-4987-99d9-669d1f9c70fd%2Ffcd7evo_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 5-9 (Algo) Compute and Use the Degree of Operating Leverage [LO5-8]
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
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 6% increase in unit sales.
3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales.
Required 2 Required 3
50,400
39,480
$ 10,920
Complete this question by entering your answers in the tabs below.
Required 1
What is the company's degree of operating leverage? (Round your answer to 2 decimal places.)
Degree of operating leverage
Transcribed Image Text: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).)
Net operating income
by
< Required 1
Required 1 Required 2 Required 3
Engberg Company
Contribution Income Statement
%6
Construct a new contribution format income statement for the company assuming a 6% increase in unit sales.
Amount Percent of Sales
%
%
%
< Required 2
Required 3 >
Required 3 >
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