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 $ 50,000 27,500 22,500 14,850 $ 7,650 15. 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 $14,850 and the total fixed expenses are $27,500. 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 %
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 $ 50,000 27,500 22,500 14,850 $ 7,650 15. 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 $14,850 and the total fixed expenses are $27,500. 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 %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
$ 50,000
27,500
22,500
14,850
$ 7,650
15. 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 $14,850 and the total fixed expenses are $27,500. 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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