ABC Corporation has five departments: administration, marketing, sales, shipping, and purchasing. Each department employs many employees. Each employee has an ID, a name, a home address, a home phone number, a salary and Social Security number. Some employees are classified as sales representatives, some as technical support, and some as administrators. Sales representatives receive a commission based on sales. Technical support employees are required to be certified in their areas of

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.