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
5. If sales decline to 900 units, what would be the net operating income?
6. If the selling price increases by $2 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 $1, spending on advertising increases by $1,500, and unit
sales increase by 250 units, 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 sales dollars?
10. How many units must be sold to achieve a target profit of $5,000?
11. What is the margin of safety in dollars? What is the margin of safety percentage?
I am having trouble with what he wants us to put in each spot. I have most of the answers...at least I believe they are correct. If someone can just help me on what to fill in the empty cells it would be so helpful! Thank you in advance :-)
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