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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	$	40,000
Variable expenses		26,000
Contribution margin		14,000
Fixed expenses		8,680
Net operating income	$	5,320

1. What is the contribution margin ratio?

2. What is the variable expense ratio?

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