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
3. What is the variable expense ratio? Round yourpercentage answer to 2 decimal places (i.e .1234 should be enteredas 12.34).
Variable expense ratio-
4. If sales increase to 1,001 units, what would be the increase innet operating income? (Round your answer to 2 decimalplaces.)
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-
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- |
Related questions
| [The following information applies to the questionsdisplayed below.] |
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 | |||||||||||
| Netoperating income | $ | 4,012 | ||||||||||
|
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 | $ | 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?
