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):

Sales | $ | 75,000 |

Variable expenses | 45,000 | |

Contribution margin | 30,000 | |

Fixed expenses | 22,800 | |

Net operating income | $ | 7,200 |

5. If sales decline to 900 units, what would be the net operating income?

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 $1,650, and unit sales increase by 230 units, what would be the net operating income?

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

Answer #1

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):
Sales
$
22,700
Variable
expenses
12,900
Contribution
margin
9,800
Fixed expenses
8,232
Net operating
income
$
1,568
5.
If sales decline to 900 units, what would be the net operating
income? (Do not round intermediate
calculations.)
6.
If the selling price increases by $1.60 per unit and...

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):
Sales
$
75,000
Variable expenses
45,000
Contribution margin
30,000
Fixed expenses
22,800
Net operating income
$
7,200
9.What is the break-even point in dollar sales?
10. How many units must be sold to achieve a target profit of
$18,000?
11. What is the margin of safety in dollars? What is the margin...

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):
Sales
$
23,900
Variable expenses
13,300
Contribution margin
10,600
Fixed expenses
7,632
Net operating income
$
2,968
Required:
What is the degree of operating leverage
Oslo Company prepared the following contribution format income
statement based on a sales volume of 1,000 units (the relevant
range...

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):
Sales
$
105,000
Variable expenses
73,500
Contribution margin
31,500
Fixed expenses
27,720
Net operating income
$
3,780
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?

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

1-4
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):
Sales
$
25,000
Variable expenses
17,500
Contribution margin
7,500
Fixed expenses
4,200
Net operating income
$
3,300
What is the contribution margin per unit?
What is the contribution margin ratio?
What is the variable expense ratio?
f sales increase to 1,001 units, what would be the increase in
net operating income?

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):
Sales
$
20,300
Variable
expenses
12,100
Contribution
margin
8,200
Fixed
expenses
6,232
Net operating
income
$
1,968
1) If
sales decline to 900 units, what would be the net operating income?
(Do not round intermediate
calculations.)
2)
If the selling price increases by $2.10 per unit...

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):
Sales
$
105,000
Variable expenses
73,500
Contribution margin
31,500
Fixed expenses
27,720
Net operating income
$
3,780
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.)

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 (Answer each question independently
and always refer to the original data unless instructed
otherwise.)
Sales $ 22,100
Variable expenses
12,700
Contribution margin
9,400
Fixed expenses
7,708
Net operating income $
1,692
7.If the variable cost per unit increases by $.80, spending on
advertising increases by $1,300, and unit sales increase by...

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):
Sales
$
70,000
Variable expenses
38,500
Contribution margin
31,500
Fixed expenses
23,310
Net operating income
$
8,190
What is the break-even point in dollar sales?
. How many units must be sold to achieve a target profit of
$18,900?
What is the margin of safety in dollars? What is the margin of...

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