The sales budget for Modesto Corp. shows that 20,200 units of Product A and 22,200 units of Product B are going to be sold for prices of $10.20 and $12.20, respectively. The desired ending inventory of Product A is 30% higher than its beginning inventory of 2,200 units. The beginning inventory of Product B is 2,700 units. The desired ending inventory of Product B is 3,200 units. Budgeted purchases of Product B for the year would be:

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.