[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
$
21,200
Variable expenses
12,400
Contribution margin
8,800
Fixed expenses
6,952
Net operating income
$
1,848
1.
What is the
contribution margin per unit? (Round your
answer to 2 decimal places.)
2.
What is the
contribution margin ratio? Round your
percentage answer to 2 decimal places (i.e .1234 should be entered as 12.34).
3.
What is the
variable expense ratio? Round your percentage
answer to 2 decimal places (i.e .1234 should be entered as 12.34).
4.
If sales
increase to 1,001 units, what would be the increase in net operating
income? (Round your answer to 2 decimal
places.)
5.
If sales
decline to 900 units, what would be the net operating income? (Do not round intermediate calculations.)
6.
If the
selling price increases by $2.40 per unit and the sales volume decreases by
100 units, what would be the net operating income? (Do not round intermediate calculations.)
7.
If the
variable cost per unit increases by $1.40, spending on advertising increases
by $1,900, and unit sales increase by 250 units, what would be the net
operating income? (Do not round intermediate
calculations.)
8.
What is the break-even point in
unit sales? (Do not round intermediate
calculations.)
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.)
10.
How many
units must be sold to achieve a target profit of $5,324? (Do not round intermediate calculations.)
11-a.
What is the margin of safety in
dollars? (Do not round intermediate
calculations.)
11-b.
What is the margin of safety
percentage? (Round your final answers to the
nearest whole percentage (i.e, .12 should be entered as 12).)
12.
What is the degree of operating
leverage? (Round your answer to 2 decimal
places.)
13.
Using the
degree of operating leverage, what is the estimated percent increase in net
operating income of a 4% increase in sales? Do
not round intermediate calculations. Round your percentage answer to 2
decimal places (i.e .1234 should be entered as 12.34).
14.
Assume that
the amounts of the companys total variable expenses and total fixed expenses
were reversed. In other words, assume that the total variable expenses are
$6,952 and the total fixed expenses are $12,400. Under this scenario and
assuming that total sales remain the same, what is the degree of operating
leverage? (Round your answer to 2 decimal
places.)
15.
Assume that
the amounts of the company’s total variable expenses and total fixed expenses
were reversed. In other words, assume that the total variable expenses are
$6,952 and the total fixed expenses are $12,400. Given this scenario, and
assuming that total sales remain the same, calculate the degree of operating
leverage. Using the calculated degree of operating leverage, what is the
estimated percent increase in net operating income of a 4% increase in
sales? Do not round intermediate
calculations. Round your percentage answer to 2 decimal places (i.e .1234
should be entered as 12.34).
. .
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