What is the degree of operating leverage on these financial accounting question? Aurora Systems Inc. prepared the following contribution format incomestatement based on a sales volume of 2,000 units (the relevant range ofproduction is 1,000 units to 3,000 units):CategoryAmount ($)Sales$40,000Variable Expenses$24,000Contribution Margin$16,000Fixed Expenses$10,000Net Operating Income $6,000What is the degree of operating leverage?

The degree of operating leverage is calculated as follows: Degree of operating leverage =…

Answered: Aurora Systems Inc. prepared the…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 16E

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Required information [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 $ 10,000 5,500 Variable expenses Contribution margin Fixed expenses 4,500 2,250 Net operating income $4 2,250 4. If sales increase to 1,001 units, what would be the increase in net operating income? (Round your answer to 2 decimal places.) Increase in net operating income
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Financial Accounting
Required information [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): $ 45,000 31,500 13,500 Sales Variable expenses Contribution margin Fixed expenses 8,640 Net operating income $ 4,860 13. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in unit sales? (Round your intermediate calculations and final answer to 2 decimal places.) Increase in net operating income |%
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