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
14a. Assume that the amounts of the companyâs total variableexpenses and total fixed expenses were reversed. In other words,assume that the total variable expenses are $30,100 and the totalfixed expenses are $65,000. Under this scenario and assuming thattotal sales remain the same, what is the degree of operatingleverage? (Round your answerto 2 decimal places.)
14b. Assume that the amounts of the companyâs total variableexpenses and total fixed expenses were reversed. In other words,assume that the total variable expenses are $30,100 and the totalfixed expenses are $65,000. Given this scenario and assuming thattotal sales remain the same. Using the degree of calculatedoperating leverage, what is the estimated percent increase in netoperating income of a 5% increase in sales? (Round your intermediate calculations andfinal answer to 2 decimal places.)
14c. What is the contribution margin per unit? (Round your answer to 2 decimalplaces.)
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 |
14a. Assume that the amounts of the companyâs total variableexpenses and total fixed expenses were reversed. In other words,assume that the total variable expenses are $30,100 and the totalfixed expenses are $65,000. Under this scenario and assuming thattotal sales remain the same, what is the degree of operatingleverage? (Round your answerto 2 decimal places.)
14b. Assume that the amounts of the companyâs total variableexpenses and total fixed expenses were reversed. In other words,assume that the total variable expenses are $30,100 and the totalfixed expenses are $65,000. Given this scenario and assuming thattotal sales remain the same. Using the degree of calculatedoperating leverage, what is the estimated percent increase in netoperating income of a 5% increase in sales? (Round your intermediate calculations andfinal answer to 2 decimal places.)
14c. What is the contribution margin per unit? (Round your answer to 2 decimalplaces.)
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 | $ | 25,700 |
| Variableexpenses | 13,900 | |
| Contributionmargin | 11,800 | |
| Fixed expenses | 7,788 | |
| Net operatingincome | $ | 4,012 |
1. What is the contribution margin per unit?
2. What is the contribution margin ratio?
3. What is the variable expense ratio?
4. If sales increase to 1,001 units, what would be the increasein net operating income?
5. If sales decline to 900 units, what would be the netoperating income?
6. If the selling price increases by $1.60 per unit and thesales volume decreases by 100 units, what would be the netoperating income?
7. If the variable cost per unit increases by $.60, spending onadvertising increases by $1,100, and unit sales increase by 250units, 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$7,906?
11a. What is the margin of safety in dollars?
11b. What is the margin of safety percentage?
12. What is the degree of operating leverage?
13. Using the degree of operating leverage, what is theestimated percent increase in net operating income of a 4% increasein sales?
14. Assume that the amounts of the companyâs total variableexpenses and total fixed expenses were reversed. In other words,assume that the total variable expenses are $7,788 and the totalfixed expenses are $13,900. Under this scenario and assuming thattotal sales remain the same, what is the degree of operatingleverage?
15. Assume that the amounts of the company's total variableexpenses and total fixed expenses were reversed. In other words,assume that the total variable expenses are $7,788 and the totalfixed expenses are $13,900. Given this scenario, and assuming thattotal sales remain the same, calculate the degree of operatingleverage. Using the calculated degree of operating leverage, whatis the estimated percent increase in net operating income of a 4%increase in 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 | $ | 23,600 |
Variable expenses | 13,200 | |
Contribution margin | 10,400 | |
Fixed expenses | 7,592 | |
Net operating income | $ | 2,808 |
1(a). If the variable cost per unit increases by $1.20, spendingon advertising increases by $1,700, and unit sales increase by 250units, what would be the net operating income? (Do notround intermediate calculations.)
1(b). What is the break-even point in unit sales? (Donot round intermediate calculations.)
1(c). What is the break-even point in dollar sales?(Round intermediate calculations to 4 decimal places. Roundyour final answer to the nearest dollar amount.)
1(d). How many units must be sold to achieve a target profit of$6,604? (Do not round intermediatecalculations.)
1(e). What is the margin of safety in dollars? (Do notround intermediate calculations.)
1(f). What is the margin of safety percentage? (Roundyour final answers to the nearest whole percentage (i.e, .12 shouldbe entered as 12).)
1(g). What is the degree of operating leverage? (Roundyour answer to 2 decimal places.)
1(h). Using the degree of operating leverage, what is theestimated percent increase in net operating income of a 5% increasein sales? Do not round intermediate calculations. Roundyour percentage answer to 2 decimal places (i.e .1234 should beentered as 12.34).
1(i). Assume that the amounts of the companyâs total variableexpenses and total fixed expenses were reversed. In other words,assume that the total variable expenses are $7,592 and the totalfixed expenses are $13,200. Under this scenario and assuming thattotal sales remain the same, what is the degree of operatingleverage? (Round your answer to 2 decimalplaces.)
1(j). Assume that the amounts of the company's total variableexpenses and total fixed expenses were reversed. In other words,assume that the total variable expenses are $7,592 and the totalfixed expenses are $13,200. Given this scenario, and assuming thattotal sales remain the same, calculate the degree of operatingleverage. Using the calculated degree of operating leverage, whatis 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 shouldbe entered as 12.34).
