Question
Oslo Company prepared the following contribution format income statement based on a sales volume of 1 , 0 0 0 units ( the relevant range
Oslo Company prepared the following contribution format income statement based on a sales volume of units the relevant range of production is units to units:
Sales $
Variable expenses
Contribution margin
Fixed expenses
Net operating income $
Foundational Algo
Assume the amounts of the companys total variable expenses and total fixed expenses were reversed. In other words, assume the total variable expenses are $ and the total fixed expenses are $ Using the degree of operating leverage, what is the estimated percent increase in net operating income of a increase in unit sales?
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ANSWER Step 1 Recalculate Contribution Margin Ratio with Reversed Costs Contribution margin 40500 Sales 90000 Variable expenses originally 49500 now 3...Get Instant Access to Expert-Tailored Solutions
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Introduction to Managerial Accounting
Authors: Peter Brewer, Ray Garrison, Eric Noreen
7th edition
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