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Oberoi Company prepared the following contribution format income statement based on a sales volume of 1,0000 units (the relevant range of production is 5000 units
Oberoi Company prepared the following contribution format income statement based on a sales volume of 1,0000 units (the relevant range of production is 5000 units to 1,5000 units): Particulars Sales Variable expenses Contribution margin Amount Tk.20,0000/- 12,0000/- 8,0000/- Fixed expenses 6,0000/- Net operating income 2,0000/- 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 1,0001 units, what would be the increase in net operating income? 5. If sales decline to 9000 units, what would be the net operating income? 6. What is the break-even point in unit sales and dollar sales? 7. How many units must be sold to achieve a target profit of $5,000? What is the margin of safety in dollars and percentage? 9. What is the degree of operating leverage? 10. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales? 8
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