Which of the following is not one of the factors to consider in determining whether a business entity meets the definition of a reportable segment:

1.It engages in sales activities with unaffiliated entities.
2.It engages in business activities from which it may earn revenues and incur expenses
3.Its operating results are regularly reviewed by the entity's chief operating decision maker.
4.Its discrete financial information is available

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.