Question
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
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 | $ | 20,000 |
Variable expenses | 12,000 | |
Contribution margin | 8,000 | |
Fixed expenses | 6,000 | |
Net operating income | $ | 2,000 |
1. If sales decline to 900 units, what would be the net operating income?
Net operating income= ?
2. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income?
Net operating income=?
3. If the variable cost per unit increases by $1, spending on advertising increases by $1,500, and unit sales increase by 250 units, what would be the net operating income?
Net operating income=?
4.. What is the break-even point in unit sales?
Break even points= ? Units
5. What is the break-even point in dollar sales?
Break even point= ?
6. How many units must be sold to achieve a target profit of $5,000?
Number of units=?
7. What is the margin of safety in dollars? What is the margin of safety percentage?
Margin of safety in dollars | ? |
Margin of safety in percentage | ? |
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