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 $ 1,00,000 $ 65,000 Contribution margin $ 35,000 Fixed expenses $ 30,100 Net operating income $ 4,900 a. If the selling price increases by $2 per unit and the sales volume decreased by 100 units, what would be the net operating income? b. If the variable cost per unit increases by $1, spending on advertising increases by $1,900, and unit sales increase by 280 units, what would be the net operating income? c. What is the break-even point in unit sales? d. What is the break-even point in dollar sales?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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
$ 1,00,000
$ 65,000
Contribution margin
$ 35,000
Fixed expenses
$ 30,100
Net operating income
$ 4,900
a. If the selling price increases by $2 per unit and the sales
volume decreased by 100 units, what would be the net
operating income?
b. If the variable cost per unit increases by $1, spending on
advertising increases by $1,900, and unit sales increase by
280 units, what would be the net operating income?
c. What is the break-even point in unit sales?
d. What is the break-even point in dollar 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 $ 1,00,000 $ 65,000 Contribution margin $ 35,000 Fixed expenses $ 30,100 Net operating income $ 4,900 a. If the selling price increases by $2 per unit and the sales volume decreased by 100 units, what would be the net operating income? b. If the variable cost per unit increases by $1, spending on advertising increases by $1,900, and unit sales increase by 280 units, what would be the net operating income? c. What is the break-even point in unit sales? d. What is the break-even point in dollar sales?
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