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).
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).
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 | $22,700 |
Variable Expenses | 12,900 |
Contribution Margin | 9,800 |
Fixed Expenses | 8,232 |
Net Operating Income | $1,568 |
Answer the following:
If sales decline to 900 units, what would be the net operatingincome? (Do not round intermediatecalculations.)
If the selling price increases by $1.60 per unit and the salesvolume decreases by 100 units, what would be the net operatingincome? (Do not round intermediatecalculations.)
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? (Do notround intermediate calculations.)
What is the break-even point in unit sales? (Do notround intermediate calculations.)
What is the break-even point in dollar sales? (Roundintermediate calculations to 4 decimal places. Round your finalanswer to the nearest dollar amount.)
How many units must be sold to achieve a target profit of$5,684? (Do not round intermediatecalculations.)
What is the margin of safety in dollars? (Do not roundintermediate calculations.)
What is the margin of safety percentage? (Round yourfinal answers to the nearest whole percentage (i.e, .12 should beentered as 12).)
What is the degree of operating leverage? (Round youranswer to 2 decimal places.)
Using the degree of operating leverage, what is the estimatedpercent increase in net operating income of a 5% increase in sales?Do not round intermediate calculations. Round yourpercentage answer to 2 decimal places (i.e .1234 should be enteredas 12.34).
Assume that the amounts of the company's total variable expensesand total fixed expenses were reversed. In other words, assume thatthe total variable expenses are $8,232 and the total fixed expensesare $12,900. Given this scenario, and assuming that total salesremain the same, calculate the degree of operating leverage. Usingthe calculated degree of operating leverage, what is the estimatedpercent increase in net operating income of a 5% increase in sales?(Do not round intermediate calculations. Round yourpercentage answer to 2 decimal places (i.e .1234 should be enteredas 12.34).
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 | |
Variable expenses | 13,900 | ||
Contribution margin | 11,800 | ||
Fixed expenses | 7,788 | ||
Net operating income | $ | 4,012 | |
|
Variable expense ratio- | |||
|
Increase in net operating Income- |
| 5. If sales decline to 900 units, what would be the netoperating income? (Do not round intermediatecalculations.) Net operating 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? (Do not round intermediatecalculations.) Net operating 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? (Do notround intermediate calculations.) Net operating Income- |
