Spring Company uses activity-based costing to allocate their overhead costs. Setup costs of $100,000 are based on number of batches. Plant service costs of $65,000 are based on square footage. Spring Company has identified 500 batches and has 10,000 square feet in their factory. What is the activity rate for the setup activity cost pool.

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.