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April 5, 2021
M3 Writing Analysis:
April 5, 2021

Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows Amount % of Sales Sales $121,000 100% Variable Expenses $48,400 40% ————————– Contribution Margin $72,600 60% Fixed Expenses $19,000 ———— Net Operating Income$53,600 a) Compute the company’s degree of operating leverage. b) Using the degree of operating leverage, estimate the impact on net operating income of a 28% increase in sales.

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