Laelle inc., a leading manufacturer of industrial air conditioners, has developed a new air conditioner with high cooling capacity. to identify potential clients who will be interested in the new air conditioner, the company has sent out pamphlets to many firms along with its contact details for anyone interested. this scenario illustrates

Engberg company installs lawn sod in home yards. the company’s most recent monthly contribution format income statement follows: amount percent of sales sales $ 80,000 100% variable expenses 32,000 40% contribution margin 48,000 60% fixed expenses 38,000 net operating income $ 10,000 required: 1. compute the company’s degree of operating leverage. (round your answer to 1 decimal place.) 2. using the degree of operating leverage, estimate the impact on net operating income of a 5% increase in sales. (do not round intermediate calculations.) 3. construct a new contribution format income statement for the company assuming a 5% increase in sales.