Oslo Company prepared the following contribution format income statement based on a sales volume of1,000 units (the relevant range of production is 500 units to 1,500 units):SalesVariable expensesContribution marginFixed expensesNet operating income$ 20,00012,0008,0006,000$ 2,000Foundational 6-14 (Static)14. Assume that the amounts of the company's total variable expenses and total fixed expenses were reversed. In otherwords, assume that the total variable expenses are $6,000 and the total fixed expenses are $12,000. Under this scenarioand assuming that total sales remain the same, what is the degree of operating leverage?Degree of operating leverage

The objective of the question is to calculate the degree of operating leverage for Oslo Company…

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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[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 $ 15,000 Variable expenses 9,000 Contribution margin 6,000 Fixed expenses 3,120 Net operating income $ 2,880 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 $3,120 and the total fixed expenses are $9,000. 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.)
According to following information, which of the following is the total cost function in the form of Y = F+V*X? Number of units produced is 18,000. Fixed Variable Total Cost Cost Costs Material used in Production 88,000 40,000 128,000 Labour used in Production 42,000 38,500 80,500 Production Facilities cost 37,000 167,000 108,000 275,000 29,500 66,500 TOTAL COST Select one: O a. Y = 275,000+V*108 O b. Y = 167,000+V*18 O CY = 167,000+V*6, O d.Y = 108,000+V*275 e to search F10 D Gy H i BY NT M
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5. Calculate the direct material from the following information: Direct expenses RO 90,000, Direct labor RO 20,000, manufacturing overheads RO 30,000 and prime cost RO 170,000. a.RO 21,000 b.RO18,000 c.RO 60,000 d.RO 20,000 6. Which of the following are used for calculating economic order frequency? i. Total annual consumption ii. No of order per year iii. Buying cost per order iv. 365 days a.i and ii b.ii and iv c.iii and iv d.i and iv
Benoit Company produces three products-A, B, and C. Data concerning the three products follow (per unit): Product B $ 62.00 Selling price Variable expenses: Direct materials Other variable expenses Total variable expenses Contribution margin Contribution margin ratio A $ 80.00 24.00 24.00 48.00 $ 32.00 Required 1 Required 2 40% Required 3 18.00 25.40 43.40 $18.60 30% с $81.00 The company estimates that it can sell 800 units of each product per month. The same raw material is used in each product. The material costs $3 per pound with a maximum of 5,000 pounds available each month. 9.00 43.65 52.65 $28.35 Required: 1. Calculate the contribution margin per pound of the constraining resource for each product. 2. Which orders would you advise the company to accept first, those for A, B, or C? Which orders second? Third? 3. What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 5,000 pounds of materials? 35% Complete this question by…
Required information [The following information applies to the questions displayed below.] Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (11,200 units at $280 each) Variable costs (11,200 units at $210 each) Contribution margin Fixed costs Income $ 3,136,000 2,352,000 784,000 567,000 $ 217,000 1. Compute break-even point in units. 2. Compute break-even point in sales dollars. 1. Break-even units 2. Break-even sales dollars units
s
A tile manufacturer has supplied the following data: Boxes of tiles produced and sold Sales revenue Variable manufacturing expense Fixed manufacturing expense Variable selling and administrative expense Fixed selling and administrative expense Net operating income a. b. $ $ What is the company's unit contribution margin? $0.86 per unit $2.35 per unit $4.10 per unit $1.75 per unit C. d. 520,000 2,132,000 650,000 $ 464,000 $ 260,000 $ 312,000 $ 446,000
Assume that a company provided the following cost formulas for three of its expenses (where q refers to the number of hours worked): Rent (fixed) $ 3,000 Supplies (variable) $ 4.00q Utilities (mixed) $150 + $0.75q The company’s planned level of activity was 2,000 hours and its actual level of activity was 1,900 hours. If these are the company’s only three expenses and the company uses revenue formula of $8.40q for budgeting purposes, what net operating income would appear in the company’s flexible budget?
Consider the following: (Click the icon to view the cases.) Requirement 1. Fill in the blanks for each of the independent cases. (a) Selling Price (b) (c) (d) (e) (f) Variable Cost Total Total Contribution Total Fixed Case per Unit per Unit Units Sold Margin Costs Net Income 12345 £ 25 128,000 £ 1,024,000 £ 953,000 13 4 100.000 823,000 22 13 243,000 13,000 29 23 65,000 25,000 12 80.000 240,000 192,000
Required information A company sold a total of 1,000 units for total sales revenue of $70,000. The company incurred total variable expenses of $38,500 and total fixed expenses of $ 23,310. Based on this, the company reported a total contribution margin of $31,500 and net operating income of $ 8,190. Use this information to answer the following questions. Assume that all units are within the relevant range. Calculate the contribution margin ratio. Contribution margin ratio %

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