Explanation As the sales decline to 900 units, the revenue diminishes to $18,000 (900*$20) and variable expenses decreases to $10,800 (900*$12). The contribution margin decreases to $7,200 ($18,000-$10,800) but the fixed expenses remain the same. So the net operating income decreases to $1,200 ($7,200-$6,000). Contribution format income statement Sales (900 units) $18,000 Variable expenses $10,800 Contribution margin $7,200 Fixed expenses

15th Edition

ISBN: 9781259405303

Author: Garrison

Publisher: MCG

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Question

Chapter 5, Problem 5F15

To determine

Net operating income: When the fixed expense is deducted from the contribution margin of the company, the remaining amount is the net operating income of the company.

The net operating income

Expert Solution & Answer

Chapter 5 Solutions

MANAGERIAL ACCT W/CONNECT >IC<

Ch. 5 - Prob. 1Q Ch. 5 - Often the most direct route to a business decision...Ch. 5 - Prob. 3Q Ch. 5 - What is the meaning of operating leverage?Ch. 5 - What is the meaning of break-even point?Ch. 5 - 5-6 In response to a request from your immediate...Ch. 5 - Prob. 7Q Ch. 5 - Prob. 8Q Ch. 5 - Prob. 9Q Ch. 5 - Prob. 1AE

Ch. 5 - Prob. 2AE Ch. 5 - Prob. 3AE Ch. 5 - Prob. 4AE Ch. 5 - Prob. 5AE Ch. 5 - Prob. 1F15 Ch. 5 - Prob. 2F15 Ch. 5 - Prob. 3F15 Ch. 5 - Prob. 4F15 Ch. 5 - Prob. 5F15 Ch. 5 - Prob. 6F15 Ch. 5 - Prob. 7F15 Ch. 5 - Prob. 8F15 Ch. 5 - Prob. 9F15 Ch. 5 - Prob. 10F15 Ch. 5 - Prob. 11F15 Ch. 5 - Prob. 12F15 Ch. 5 - Prob. 13F15 Ch. 5 - Prob. 14F15 Ch. 5 - Prob. 15F15 Ch. 5 - Prob. 1E Ch. 5 - Prob. 2E Ch. 5 - Prob. 3E Ch. 5 - Prob. 4E Ch. 5 - Prob. 5E Ch. 5 - Prob. 6E Ch. 5 - Prob. 7E Ch. 5 - Prob. 8E Ch. 5 - Prob. 9E Ch. 5 - EXERCISE 5-10 Multiproduct Break-Even Analysis...Ch. 5 - Prob. 11E Ch. 5 - EXERCISE 5-12 Multiproduct Break-Even Analysis...Ch. 5 - EXERCISE 5-13 Changes in Selling Price, Sales...Ch. 5 - Prob. 14E Ch. 5 - Prob. 15E Ch. 5 - Prob. 16E Ch. 5 - Prob. 17E Ch. 5 - Prob. 18E Ch. 5 - Prob. 19P Ch. 5 - PROBLEM 5-20 CVP Applications: Break-Even...Ch. 5 - PROBLEM 5-21 Sales Mix; Multiproduct Break-Even...Ch. 5 - Prob. 22P Ch. 5 - Prob. 23P Ch. 5 - Prob. 24P Ch. 5 - PROBLEM 5-25 Changes in Fixed and Variable Costs;...Ch. 5 - PROBLEM 5-26 CVP Applications; Break-Even...Ch. 5 - Prob. 27P Ch. 5 - Prob. 28P Ch. 5 - Prob. 29P Ch. 5 - Prob. 30P Ch. 5 - PROBLEM 5-31 Interpretive Questions on the CVP...Ch. 5 - CASE 5-32 Break-Even Analysis for Individual...Ch. 5 - Prob. 33C

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