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Question & Answer: Oslo Company prepared the following contribution format income statement based on a sales volume…..

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 $ 25,100
  Variable expenses 13,700
  Contribution margin 11,400
  Fixed expenses 7,752
  Net operating income $ 3,648
Required:
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 increase in net operating income?

5. If sales decline to 900 units, what would be the net operating income?

6. If the selling price increases by $1.80 per unit and the sales volume decreases by 100 units, what would be the net operating income?

7. If the variable cost per unit increases by $.80, spending on advertising increases by $1,300, and unit sales increase by 250 units, what would be the net operating income?

Expert Answer

 

Question & Answer: Oslo Company prepared the following contribution format income statement based on a sales volume..... 1

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