Question

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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	$	55,000
Variable expenses		33,000
Contribution margin		22,000
Fixed expenses		14,960
Net operating income	$	7,040

6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income?

Answer 1

6
Sales (900 units)	51300	=900*(55+2)
Variable expenses	29700	=900*33
Contribution margin	21600
Fixed expenses	14960
Net operating income	6640