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 $ 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 rounded to 2 decimal places (i.e., 0.13579 should be
entered as 13.58).)

3. What is the variable expense ratio? (Round your percentage
answer to 2 decimal places (i.e .1234 should be entered as
12.34).

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

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 $1.90 per unit and the sales
volume decreases by 100 units, what would be the net operating
income (Do not round intermediate calculations.)

7. If the variable cost per unit increases by $.90, spending on
advertising increases by $1,400, and unit sales increase by 250
units, what would be the net operating income? (Do not round
intermediate calculations.)

8. What is the break-even point in unit sales? (Do not round
intermediate calculations.)

9. What is the break-even point in dollar sales? (Round
intermediate calculations to 4 decimal places. Round your answer to
the nearest dollar amount.)

10. How many units must be sold to achieve a target profit of
$5,474? (Do not round intermediate calculations.)

11-a. What is the margin of safety in dollars? (Do not round
intermediate calculations.)

11-b. What is the margin of safety percentage? (Round your final answers to the nearest whole percentage (i.e, .12 should be entered as 12).)

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?
(Do not round intermediate calculations. Round your percentage
answer to 2 decimal places (i.e .1234 should be entered as
12.34).

14. Assume that the amounts of the company’s total variable
expenses and total fixed expenses were reversed. In other words,
assume that the total variable expenses are $7,452 and the total
fixed expenses are $12,600. Under this scenario and assuming that
total sales remain the same, what is the degree of operating
leverage? (Round your answer to 2 decimal places.)

15. Assume that the amounts of the company's total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $7,452 and the total fixed expenses are $12,600. Given this scenario, and assuming that total sales remain the same, calculate the degree of operating leverage. Using the calculated degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales? (Do not round intermediate calculations. Round your percentage answer to 2 decimal places (i.e .1234 should be entered as 12.34).

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 $ 24,200
Variable expenses 13,400 Contribution margin 10,800 Fixed expenses
7,668 Net operating income $ 3,132 1. What is the margin of safety
in dollars? (Do not round intermediate calculations.) 2. What is
the margin of safety percentage? (Round your final answers to the
nearest whole percentage (i.e, .12 should 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):
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
$
22,700
Variable
expenses
12,900
Contribution
margin
9,800
Fixed expenses
8,232
Net operating
income
$
1,568
13.
Using the degree of operating leverage, what is the estimated
percent increase in net operating income of a 5% increase in sales?
Do not round intermediate calculations. Round your...

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...

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
$
15,000
Variable expenses
9,000
Contribution margin
6,000
Fixed expenses
3,120
Net operating income
$
2,880
11. What is the margin of safety in dollars? What is the margin
of safety percentage?
margin of safety in dollars____
margin of safety percentage____
12. What is the degree of operating leverage? (Round
your...

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

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