0 equired information The following information applies to the questions display

Question

0 equired information The following information applies to the questions displayed below.1 Oslo Company prepared the following contribution format income statement based on a s relevant range of production is 500 units to 1,500 units): Sales Variable expenses Contribution margin Fixed expenses Net operating income 35,000 21,000 14,000 8,400 $5,600 13. Using the degree of operating leverage, what is the estimated percent increase in net operating Round your intermediate calculations and final answer to 2 decimal places.) Increase in net operating income DOLL F3 F4 FS F6 F7 F8 F9 F10 F11 F12

Explanation / Answer

Operating leverage = contribution margin/net operating income

= 14000/5600

= 2.50

% Increase in sales = 5% (I am assuming this figure as your image is not full and hence the % increase in sales is not given).

Thus Increase in net operating income = 2.5*5

= 12.50%

(So increase in net operating income = 2.5*% increase in sales).

Multiply the % increase in sales with 2.5o and you will get the answer.

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