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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 Variable expenses $21,800 12,600 Contribution margin 9,200 Fixed expenses 7,452 Net operating income $1,748 Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in 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 Variable expenses $21,800 12,600 Contribution margin 9,200 Fixed expenses 7,452 Net operating income $1,748 Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 Variable expenses $21,800 12,600 Contribution margin 9,200 Fixed expenses 7,452 Net operating income $1,748 Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales?
Transcribed Image Text: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 Variable expenses $21,800 12,600 Contribution margin 9,200 Fixed expenses 7,452 Net operating income $1,748 Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales?
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