Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,000

Variable expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000

Contribution margin . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000

Fixed expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000

Net operating income. . . . . . . . . . . . . . . . . . . . . . . . . $ 2,000

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):

1. What is the contribution margin per unit?

2. What is the contribution margin ratio?

3. What is the variable expense ratio?

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 dollar sales?

11. What is the margin of safety in dollars? What is the margin of safety percentage?

12. What is the degree of operating leverage?

13. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales?