Toyota Company prepared the following contribution format income statement based on a sales volume of:
2500	units

Sales	$ 50,000
Variable expenses	$ 30,000
Contribution margin	$ 20,000
Fixed expenses	$ 15,000
Net operating income	$ 5,000

Question 1. How many units must be sold to achieve a target profit of: $ 5,000 ?

[Question 2 - 15]

Toyota Company prepared the following contribution format income statement based on a sales volume of:
2500	units

Sales	$ 50,000
Variable expenses	$ 30,000
Contribution margin	$ 20,000
Fixed expenses	$ 15,000
Net operating income	$ 5,000

Question 2. What is the variable expense ratio?

Question 3. What is the contribution margin ratio?

Question 4. What is the unit contribution margin?

Question 5. If sales decline to 2250 units. What would be the net operating income?

Question 6. The above data shows the Toyota's income statement assuming that the total variable expenses and total fixed expenses were reversed and that total sales remain the same. Under this scenario, what is the degree of operating leverage?

Question 7. Using the degree of operating leverage you computed in the previous question, if there is a 5% increase in sales, what is the estimated percent increase in net operating income?

Question 8. What is the degree of operating leverage?

Question 9. Using the degree of operating leverage, if there is a 5% increase in sales, what is the estimated percent increase in net operating income?

Question 10. What is the margin of safety in dollars? What is the margin of safety percentage?

Question 11. What is the break-even point in sales dollars?

Question 12. If the variable cost per unit increases by $ 1 per unit, spending on advertising increases by $ 3,750 , and

unit sales increase by 625 units.

What is net operating income?

Question 13. What is the break-even point in unit sales?

Question 14. Assume sales increase to 2501units. What would be the increase in net operating income?

Question 15. If the selling price increases by $2 per unit, and the sales volume decreases by 250 units.

What would be the net operating income?