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 7% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 7% increase in unit sales. $ POLE 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 7% increase in unit sales. Engberg Company Contribution Income Statement Amount 0 Sales 100% 40 60% 0 Percent of Sales % % 0% < Required 2 Required 3
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 7% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 7% increase in unit sales. $ POLE 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 7% increase in unit sales. Engberg Company Contribution Income Statement Amount 0 Sales 100% 40 60% 0 Percent of Sales % % 0% < Required 2 Required 3
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:9
Sales
Variable expenses
Contribution margin
Fixed expenses
Net operating income
Amount
$ 96,000
38,400
57,600
45,120
$ 12,480
$
Mereu
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.
Complete this question by entering your answers in the tabs below.
Sales
100%
40
60%
Required 1 Required 2
Required 3
Construct a new contribution format income statement for the company assuming a 7% increase in unit sales.
Engberg Company
Contribution Income Statement
Amount
0
Percent of Sales
%
%
Required 2
0%
Required 3 >
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