Oslo Company prepared the following contribution format incomestatement based on a sales volume of 1,000 units (the relevantrange of production is 500 units to 1,500 units):
Sales $ 100,000 Variableexpenses 65,000 Contribution margin 35,000 Fixedexpenses 30,100 Netoperating income $ 4,900
2a. What is the contribution margin ratio?
2b.What is the variable expense ratio?
2c. If sales increase to 1,001 units, what would be the increasein net operating income?
2d. If sales decline to 900 units, what would be the netoperating income?
Oslo Company prepared the following contribution format incomestatement based on a sales volume of 1,000 units (the relevantrange of production is 500 units to 1,500 units):
| Sales | $ | 100,000 |
| Variableexpenses | 65,000 | |
| Contribution margin | 35,000 | |
| Fixedexpenses | 30,100 | |
| Netoperating income | $ | 4,900 |
2a. What is the contribution margin ratio?
2b.What is the variable expense ratio?
2c. If sales increase to 1,001 units, what would be the increasein net operating income?
2d. If sales decline to 900 units, what would be the netoperating income?
Related questions
Oslo Company prepared the following contribution format incomestatement based on a sales volume of 1,000 units (the relevantrange of production is 500 units to 1,500 units):
| Sales | $ | 100,000 |
| Variableexpenses | 65,000 | |
| Contribution margin | 35,000 | |
| Fixedexpenses | 30,100 | |
| Netoperating income | $ | 4,900 |
13a. Using the degree of operating leverage, what is theestimated percent increase in net operating income of a 5% increasein sales? (Round yourintermediate calculations and final answer to 2 decimalplaces.)
13b. What is the margin of safety in dollars?What is the margin of safety percentage?
| Margin of safety indollars | ||
| Margin of safetypercentage |
Oslo Company prepared the following contribution format incomestatement based on a sales volume of 1,000 units (the relevantrange of production is 500 units to 1,500 units):
| Sales | $ | 100,000 |
| Variableexpenses | 65,000 | |
| Contribution margin | 35,000 | |
| Fixedexpenses | 30,100 | |
| Netoperating income | $ | 4,900 |
10a. How many units must be sold to achieve a target profit of$21,000?
10b. What is the margin of safety in dollars? What is the marginof safety percentage?
10c. What is the degree of operating leverage?
10d. Using the degree of operating leverage, what is theestimated percent increase in net operating income of a 5% increasein sales?
Oslo Company prepared the following contribution format incomestatement based on a sales volume of 1,000 units (the relevantrange of production is 500 units to 1,500 units):
| Sales | $ | 100,000 |
| Variableexpenses | 65,000 | |
| Contribution margin | 35,000 | |
| Fixedexpenses | 30,100 | |
| Netoperating income | $ | 4,900 |
6a. If the selling price increases by $2 per unit and the salesvolume decreases by 100 units, what would be the net operatingincome?
6b. If the variable cost per unit increases by $1, spending onadvertising increases by $1,900, and unit sales increase by 280units, what would be the net operating income?
6c. What is the break-even point in unit sales?
6d. What is the break-even point in dollar sales?
