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 |
14. 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 $14,960 and the total fixed expenses are $33,000. 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.)
14.
| Sales | $ | 55,000 |
| Variable expenses | 14960 | |
| Contribution margin | 40040 | |
| Fixed expenses | 33000 | |
| Net operating income | $ | 7,040 |
Degree of operating leverage = Contribution margin / net operating income
= 40040/7040
= 5.69
Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000...
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): Sales $ 55,000 Variable expenses 33,000 Contribution margin 22,000 Fixed expenses 14,960 Net operating income $ 7,040 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 $14,960 and the total fixed expenses are $33,000....
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): Sales $ 55,000 Variable expenses 33,000 Contribution margin 22,000 Fixed expenses 14,960 Net operating income $ 7,040 5. If sales decline to 900 units, what would be the net operating income?
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 8. What is the break-even point in unit sales?
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 11. What is the margin of safety in dollars? What is the margin of safety percentage?
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 7. If the variable cost per unit increases by $1, spending on advertising increases by $1,450, and unit sales increase by 190 units, what would be the net operating income?
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 $ 40,000 Variable expenses 26,000 Contribution margin 14,000 Fixed expenses 8,680 Net operating income $ 5,320 1 Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales? (Round your intermediate calculations and final answer to 2 decimal places.) 2....
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 $ 105,000 Variable expenses 73,500 Contribution margin 31,500 Fixed expenses 27,720 Net operating income $ 3,780 14. 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 $27,720 and the total fixed expenses are $73,500....
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 $ 20,000 Variable expenses 13,000 Contribution margin 7,000 Fixed expenses 3,780 Net operating income $ 3,220 7. If the variable cost per unit increases by $1, spending on advertising increases by $1,100, and unit sales increase by 120 units, what would be the net operating income? 8. What is the break-even...
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 $85,000, variable expenses 59,500, contribution margin 25,500, fixed expenses 20,400, net operating income $5,100. what is the degree of operating leverage? ( round answer to 2 decimal places.) using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales? (round...
OSLO COMPANY PREPARED THE FOLLOWING CONTRIBUTION FORMAT INCOME STATEMENT BASED ON A SALES VOLUME OF 1,000 UNITS THE RELEVANT RANGE OF PRODUCTION OF 500 UNITS TO 1500 UNITS): SALES: $20,000 VARIABLE EXPENSES 12,000 CONTRIBUTION MARGIN 8,000 FIXED EXPENSES 6,000 NET OPERATING INCOME 2,000 SHOW ALL WORK 1. 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 NET OPERATING INCOME? 2. WHAT IS THE BREAK...