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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

$

24,500    

  Variable expenses


13,500    




  Contribution margin


11,000    

  Fixed expenses


7,700    




  Net operating income

$

3,300    




Q1-What is the contribution margin per unit? (Round your answer to 2 decimal places.)

Q2- What is the contribution margin ratio? Round your percentage answer to 2 decimal places

Q3- What is the variable expense ratio? Round your percentage answer to 2 decimal places

Q4- If sales increase to 1,001 units, what would be the increase in net operating income? (Round your answer to 2 decimal places.)

Q5- If sales decline to 900 units, what would be the net operating income?

Q6- If the selling price increases by $2.50 per unit and the sales volume decreases by 100 units, what would be the net operating income?

Q7- If the variable cost per unit increases by $1.50, spending on advertising increases by $2,000, and unit sales increase by 250 units, what would be the net operating income?

Q8- What is the break-even point in unit sales?

Q9- What is the break-even point in dollar sales? (Round intermediate calculations to 4 decimal places. Round your final answer to the nearest dollar amount.)

Q10- How many units must be sold to achieve a target profit of $7,150?

Q11- A. What is the margin of safety in dollars?

Q11-B. What is the margin of safely percentage?

Q12-What is the degree of operating leverage? (Round your answer to 2 decimal places.)

Q13- Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales?

Q14- 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 $7,700 and the total fixed expenses are $13,500. Under this scenario and assuming that total sales remain the same, what is the degree of operating leverage?

Q15- 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 $7,700 and the total fixed expenses are $13,500. 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?

 

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M91625833

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