None Oslo Company prepared the following contribution formatincome statement based on a sales volume of 1,000 units (therelevant range of production is 500 units to 1,500 units):SalesVariable expenses$21,80012,600Contribution margin 9,200Fixed expenses7,452Net operating income $1,748Using the degree of operating leverage, what is the estimatedpercent increase in net operating income of a 5% increase insales?

Step 1: Introduction to the Operating Income IncreaseWhen a company applies the contribution format…

Answered: Oslo Company prepared the following…

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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A U Ltd manufactures and sells a single product, the company's sales and expenses for themonth of January 2021 were as follows:Total (Kshs)Value per unit (Kshs)Sales1.200.0080.00Less: Variable expenses840.0056.00Contribution360.0024.00Less: Fixed expenses300.00Net income60.00Required:What is the monthly breakeven point in units and in shillings?What is the total contribution margin at breakeven point?How many units would be sold each month to carn a minimum target net income ofkshs. 36.000?(iv)Using the original data, compute a company's margin of safety in both shilling and in percentage termsWhat is the contribution margin ratio, if the monthly sales increase by Kshs 16,000?
If the contribution margin ratio for France Company is 32%, sales are $488,000, and fixed costs are $110,000, the operating income is Oa. S110,000 Ob. $46,160 Oc. $36,928 Od. S156,160 Previous Submit Te Reflector-3.2.1.dmg
Information on company A is provided in the table: Item Total amount in Eur Number of units is 200 Sales 32000 Variable costs 16000 Contribution margin 16000 Fixed expenses 9000 Net operating income (profit) 7000 Calculate the revised net operating income (profit) (total amount, not the difference) if sales volume (in units) decreases by 10 units and fixed expenses increase by 500Eur.
A company has following details for this yearDetails Total sales($) Total cost($) Details Total sales($) Total cost($)Year ended 31/12/2018 35,78,998 25,89,709Year ended 31/12/2019 48,90,742 31,67,984 Calculate P/V ratio, Fixed cost, break even sales, Margin of safety 2018/2019, Variable cost 2018/2019and percent of fixed cost 2018/2019
Sales (18,00e units) Variable expenses Contribution margin Fixed expenses $ 368,008 144,e00 216,eee 188,eee $ 36,000 Operating incone Required: Answer each question Independently based on the original data: 1. What is the product's CM ratio? 2 Use the CM ratio to determine the break-even polnt in sales dollars.
Jellico Inc.’s projected operating income (based on sales of 450,000 units) for the coming year isas follows:TotalSales $11,700,000Total variable cost 8,190,000Contribution margin $ 3,510,000Total fixed cost 2,254,200Operating income $ 1,255,800Required:1. Compute: (a) variable cost per unit, (b) contribution margin per unit, (c) contribution margin ratio, (d) break-even point in units, and (e) break-even point in sales dollars.2. How many units must be sold to earn operating income of $296,400?3. Compute the additional operating income that Jellico would earn if sales were $50,000 morethan expected.4. For the projected level of sales, compute the margin of safety in units, and then in salesdollars.5. Compute the degree of operating leverage. (Note: Round answer to two decimal places.)6. Compute the new operating income if sales are 10% higher than expected.
Selling price per unit -$17; Selling & administrative (fixed expense)- $130 000; Interest expense (fixed expense)- $10 000; COGS (variable expense) - $4; Selling or administrative (variable expense)- $3; What is the company's contribution margin?
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
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 Variable expenses Contribution margin Fixed expenses Net operating income $ 80,000 52,000 28,000 21,840 $ 6,160 Required: 4. If sales increase to 1,001 units, what would be the increase in net operating income? Note: Round your answer to 2 decimal places. Increase in net operating income
CVP Analysis, *What IT?" AnalysisKevin Co. projected contribution-format income statement for the upcoming month is shownBelow Sales (500 units) $10000Variable expenses. 4000Contributions margin. 6000Fixed expenses. 1000Net operating income. 5000Required:a.) Compute the breakeven point in units.b) Compute the breakeven paint in dollars.c.) If the company wishes to earn a monthly target profit of $10,000, how many units must be sold each month?d.) Compute the company's margin of safety. State your answer in both dollar and percentage terms,e.) The company's manager thinks that adding a salaried sales staff member at a cost of 52,000 per month will increase sales by $4,000 per month. If he is correct, what will be the net dollar advantage or disadvantage of making this change?t.) Refer to the original data, the company's manager believes that a new production process will improve profitability. He plans to add new machinery that will cut variable expenses…
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 Questions: A) 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.) B) 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 $3,780 and the total fixed expenses are $13,000. 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.) C) Assume that the amounts of the company’s total variable expenses and total fixed…
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