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 | $ | 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 safety percentage?

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

Answer #1

Contribution Margin ratio = $31500 / 70000 = 45%

Break even point in dollars = Fixed Expenses / Contribution
Margin ratio

= $23310 / 45% = $51800

Units to be sold for target profit = (Fixed Expenses+Target
profit) / Contribution Margin per unit

= ($23310+18900) / 31.50 = 1340 units

Margin of safety = Actual sales - Break even sales

= $70000 - $51800 = $18200

Margin of safety percentage = $18200 / 70000 = 26%

Degree of Operating leverage = Contribution Margin / Net
operating income

= $31500 / 8190 = 3.85

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): 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
$
105,000
Variable expenses
73,500
Contribution margin
31,500
Fixed expenses
27,720
Net operating income
$
3,780
Foundational 5-11
A. What is the margin of safety in dollars? What is the margin
of safety percentage?
B. What is the degree of operating leverage? (Round your
answer to 2 decimal places.)
C. Using...

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
$
65,000
Variable expenses
45,500
Contribution margin
19,500
Fixed expenses
14,040
Net operating income
$
5,460
1. What is the margin of safety in dollars? What is the margin
of safety percentage?
2. What is the degree of operating leverage? (Round your
answer to 2 decimal places.)
3. Using the degree...

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...

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
12.What us tge degree of operating leverage?
13.Using the degree of operating leverage, what is the estimated
percent increase in...

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 $ 30,000
Variable expenses 16,500
Contribution margin 13,500
Fixed expenses 7,830
Net operating income $ 5,670 Required:
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):
Sales $ 21,800
Variable expenses 12,600
Contribution margin 9,200
Fixed expenses 7,452
Net operating income $ 1,748
1. What is the contribution margin per unit? (Round your answer
to 2 decimal places.)
2. What is the contribution margin ratio? (Enter your answer as a
percentage...

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