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 $ 26,000 14,000 12,000 7,800 4,200 $ Required: Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 3% increase in sales? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Percent increase in 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 Variable expenses Contribution margin. Fixed expenses Net operating income $ 26,000 14,000 12,000 7,800 4,200 $ Required: Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 3% increase in sales? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Percent increase in net operating income %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Munabhai
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
Contribution margin.
Fixed expenses
Net operating income
$ 26,000
14,000
12,000
7,800
4,200
$
Required:
Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 3% increase in sales? (Do
not round intermediate calculations. Round your answer to 2 decimal places.)
Percent increase in net operating income
%
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