Oslo Company prepared the following contribution format income statement based o

Question

Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units):

Required:

1. What is the contribution margin per unit? (Round your answer to 2 decimal places.)

2. What is the contribution margin ratio?

4.If sales increase to 1,001 units, what would be the increase in net operating income? (Round your answer to 2 decimal places.)

6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income?

7. If the variable cost per unit increases by $1, spending on advertising increases by $1,400, and unit sales increase by 180 units, what would be the net operating income?

8. What is the break-even point in unit sales?

9. What is the break-even point in dollar sales?

10. How many units must be sold to achieve a target profit of $13,500?

11. What is the margin of safety in dollars? What is the margin of safety percentage?

12. What is the degree of operating leverage? (Round your answer to 2 decimal places.)

13. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales? (Round your intermediate calculations and final answer to 2 decimal places.)

Sales $ 50,000 Variable expenses 27,500 Contribution margin 22,500 Fixed expenses 14,850 Net operating income $ 7,650

Explanation / Answer

As per chegg guidelines we answer one question per post and maximum 4 parts per question. Kindly post remaining parts in next post Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Per unit Amount Sales                    50.00            50,000.00 Less Variable Expenses                  (27.50)         (27,500.00) 1) Contribution Margin                    22.50            22,500.00 2) Contribution margin ratio = Contribution/Sales 45.00% 45.00% 4) If sales increase to 1,001 units, what would be the increase in net operating income = 22.50*1                    22.50 6) Sales            46,800.00 Less Variable Expenses         (24,750.00) Contribution Margin            22,050.00 Less Fixed cost         (14,850.00) Net operating income              7,200.00

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.