Question
[The following information applies to the questions displayed below.] Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000
[The following information applies to the questions displayed below.] |
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 | $ | 20,600 |
Variable expenses | 12,200 | |
Contribution margin | 8,400 | |
Fixed expenses | 6,468 | |
Net operating income | $ | 1,932 |
1.
value: 0.50 points
Required information
Required: |
1. | What is the contribution margin per unit? (Round your answer to 2 decimal places.) |
References
eBook & Resources
WorksheetLearning Objective: 05-03 Use the contribution margin ratio (CM ratio) to compute changes in contribution margin and net operating income resulting from changes in sales volume.Learning Objective: 05-06 Determine the level of sales needed to achieve a desired target profit.
Difficulty: 2 MediumLearning Objective: 05-04 Show the effects on net operating income of changes in variable costs, fixed costs, selling price, and volume.Learning Objective: 05-07 Compute the margin of safety and explain its significance.
Learning Objective: 05-01 Explain how changes in activity affect contribution margin and net operating income.Learning Objective: 05-05 Determine the break-even point.Learning Objective: 05-08 Compute the degree of operating leverage at a particular level of sales and explain how it can be used to predict changes in net operating income.
Check my work
2.
value: 0.50 points
Required information
2. | What is the contribution margin ratio? Round your percentage answer to 2 decimal places (i.e .1234 should be entered as 12.34). |
References
eBook & Resources
WorksheetLearning Objective: 05-03 Use the contribution margin ratio (CM ratio) to compute changes in contribution margin and net operating income resulting from changes in sales volume.Learning Objective: 05-06 Determine the level of sales needed to achieve a desired target profit.
Difficulty: 2 MediumLearning Objective: 05-04 Show the effects on net operating income of changes in variable costs, fixed costs, selling price, and volume.Learning Objective: 05-07 Compute the margin of safety and explain its significance.
Learning Objective: 05-01 Explain how changes in activity affect contribution margin and net operating income.Learning Objective: 05-05 Determine the break-even point.Learning Objective: 05-08 Compute the degree of operating leverage at a particular level of sales and explain how it can be used to predict changes in net operating income.
Check my work
3.
value: 0.50 points
Required information
3. | What is the variable expense ratio? Round your percentage answer to 2 decimal places (i.e .1234 should be entered as 12.34). |
References
eBook & Resources
WorksheetLearning Objective: 05-03 Use the contribution margin ratio (CM ratio) to compute changes in contribution margin and net operating income resulting from changes in sales volume.Learning Objective: 05-06 Determine the level of sales needed to achieve a desired target profit.
Difficulty: 2 MediumLearning Objective: 05-04 Show the effects on net operating income of changes in variable costs, fixed costs, selling price, and volume.Learning Objective: 05-07 Compute the margin of safety and explain its significance.
Learning Objective: 05-01 Explain how changes in activity affect contribution margin and net operating income.Learning Objective: 05-05 Determine the break-even point.Learning Objective: 05-08 Compute the degree of operating leverage at a particular level of sales and explain how it can be used to predict changes in net operating income.
Check my work
4.
value: 0.50 points
Required information
4. | If sales increase to 1,001 units, what would be the increase in net operating income? (Round your answer to 2 decimal places.) |
References
eBook & Resources
WorksheetLearning Objective: 05-03 Use the contribution margin ratio (CM ratio) to compute changes in contribution margin and net operating income resulting from changes in sales volume.Learning Objective: 05-06 Determine the level of sales needed to achieve a desired target profit.
Difficulty: 2 MediumLearning Objective: 05-04 Show the effects on net operating income of changes in variable costs, fixed costs, selling price, and volume.Learning Objective: 05-07 Compute the margin of safety and explain its significance.
Learning Objective: 05-01 Explain how changes in activity affect contribution margin and net operating income.Learning Objective: 05-05 Determine the break-even point.Learning Objective: 05-08 Compute the degree of operating leverage at a particular level of sales and explain how it can be used to predict changes in net operating income.
Check my work
5.
value: 0.50 points
Required information
5. | If sales decline to 900 units, what would be the net operating income? (Do not round intermediate calculations.) |
References
eBook & Resources
WorksheetLearning Objective: 05-03 Use the contribution margin ratio (CM ratio) to compute changes in contribution margin and net operating income resulting from changes in sales volume.Learning Objective: 05-06 Determine the level of sales needed to achieve a desired target profit.
Difficulty: 2 MediumLearning Objective: 05-04 Show the effects on net operating income of changes in variable costs, fixed costs, selling price, and volume.Learning Objective: 05-07 Compute the margin of safety and explain its significance.
Learning Objective: 05-01 Explain how changes in activity affect contribution margin and net operating income.Learning Objective: 05-05 Determine the break-even point.Learning Objective: 05-08 Compute the degree of operating leverage at a particular level of sales and explain how it can be used to predict changes in net operating income.
Check my work
6.
value: 0.50 points
Required information
6. | If the selling price increases by $2.20 per unit and the sales volume decreases by 100 units, what would be the net operating income? (Do not round intermediate calculations.) |
References
eBook & Resources
WorksheetLearning Objective: 05-03 Use the contribution margin ratio (CM ratio) to compute changes in contribution margin and net operating income resulting from changes in sales volume.Learning Objective: 05-06 Determine the level of sales needed to achieve a desired target profit.
Difficulty: 2 MediumLearning Objective: 05-04 Show the effects on net operating income of changes in variable costs, fixed costs, selling price, and volume.Learning Objective: 05-07 Compute the margin of safety and explain its significance.
Learning Objective: 05-01 Explain how changes in activity affect contribution margin and net operating income.Learning Objective: 05-05 Determine the break-even point.Learning Objective: 05-08 Compute the degree of operating leverage at a particular level of sales and explain how it can be used to predict changes in net operating income.
Check my work
7.
value: 0.50 points
Required information
7. | If the variable cost per unit increases by $1.20, spending on advertising increases by $1,700, and unit sales increase by 250 units, what would be the net operating income? (Do not round intermediate calculations.) |
References
eBook & Resources
WorksheetLearning Objective: 05-03 Use the contribution margin ratio (CM ratio) to compute changes in contribution margin and net operating income resulting from changes in sales volume.Learning Objective: 05-06 Determine the level of sales needed to achieve a desired target profit.
Difficulty: 2 MediumLearning Objective: 05-04 Show the effects on net operating income of changes in variable costs, fixed costs, selling price, and volume.Learning Objective: 05-07 Compute the margin of safety and explain its significance.
Learning Objective: 05-01 Explain how changes in activity affect contribution margin and net operating income.Learning Objective: 05-05 Determine the break-even point.Learning Objective: 05-08 Compute the degree of operating leverage at a particular level of sales and explain how it can be used to predict changes in net operating income.
Check my work
8.
value: 0.50 points
Required information
8. | What is the break-even point in unit sales? (Do not round intermediate calculations.) |
References
eBook & Resources
WorksheetLearning Objective: 05-03 Use the contribution margin ratio (CM ratio) to compute changes in contribution margin and net operating income resulting from changes in sales volume.Learning Objective: 05-06 Determine the level of sales needed to achieve a desired target profit.
Difficulty: 2 MediumLearning Objective: 05-04 Show the effects on net operating income of changes in variable costs, fixed costs, selling price, and volume.Learning Objective: 05-07 Compute the margin of safety and explain its significance.
Learning Objective: 05-01 Explain how changes in activity affect contribution margin and net operating income.Learning Objective: 05-05 Determine the break-even point.Learning Objective: 05-08 Compute the degree of operating leverage at a particular level of sales and explain how it can be used to predict changes in net operating income.
Check my work
9.
value: 0.50 points
Required information
9. | What is the break-even point in dollar sales? (Round intermediate calculations to 4 decimal places. Round your final answer to the nearest dollar amount.) |
rev: 03_10_2015_QC_CS-10418
References
eBook & Resources
WorksheetLearning Objective: 05-03 Use the contribution margin ratio (CM ratio) to compute changes in contribution margin and net operating income resulting from changes in sales volume.Learning Objective: 05-06 Determine the level of sales needed to achieve a desired target profit.
Difficulty: 2 MediumLearning Objective: 05-04 Show the effects on net operating income of changes in variable costs, fixed costs, selling price, and volume.Learning Objective: 05-07 Compute the margin of safety and explain its significance.
Learning Objective: 05-01 Explain how changes in activity affect contribution margin and net operating income.Learning Objective: 05-05 Determine the break-even point.Learning Objective: 05-08 Compute the degree of operating leverage at a particular level of sales and explain how it can be used to predict changes in net operating income.
Check my work
10.
value: 0.50 points
Required information
10. | How many units must be sold to achieve a target profit of $5,166? (Do not round intermediate calculations.) |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started