slo 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) If the variable cost per unit increases by $1, spending on advertising increases by $1,100, and unit sales increase by 120 units, what would be the net operating income? B) What is the break-even point in unit sales? C) What is the break-even point in dollar sales?
slo 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) If the variable cost per unit increases by $1, spending on advertising increases by $1,100, and unit sales increase by 120 units, what would be the net operating income? B) What is the break-even point in unit sales? C) What is the break-even point in dollar sales?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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) If the variable cost per unit increases by $1, spending on advertising increases by $1,100, and unit sales increase by 120 units, what would be the net operating income?
B) What is the break-even point in unit sales?
C) What is the break-even point in dollar sales?
![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
$20,000
13,000
7,000
3,780
Net operating income $ 3,220](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4069fa52-b27a-46d1-ae2b-57cc56c25309%2F6a5fdf94-6425-4217-867b-d30f6480b4e1%2F65cqfh_processed.png&w=3840&q=75)
Transcribed Image Text: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
$20,000
13,000
7,000
3,780
Net operating income $ 3,220
Expert Solution
Step 1 Introduction
The break even sales units are calculated as fixed cost divided by Contribution margin per unit.
Break even sales dollars is calculated as fixed cost divided by contribution margin ratio.
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