Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Indirect labor $1.20
Indirect materials 0.60
Utilities 0.40

Fixed overhead costs per month are Supervision $4,000, Depreciation $1,600, and Property Taxes $800. The company believes it will normally operate in a range of 6,200- 11,600 direct labor hours per month. Prepare a monthly manufacturing overhead flexible budget for 2017 for the expected range of activity, using increments of 1,800 direct labor hours.

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.