If the variable cost per unit increases by 1 spending on

Reference no: EM13587389

Oslo Compnay prepared the following contribution income statement based on a sales volume of 1,00 units (the relevant rango of production is 500 units to 1,500 units);

Sales $20,000
Variable expenses $12,000
Contribution Margin $8,000
Fixed Expenses $6,000

Net Operating Income $2,000

1. What is the contribution margin per unit?

2. What is the contribution margin ratio?

3. What is the variable expense ratio?

4. If the sales increase to 1,001 units, what would be in te increase in net operating income?

5. If sales decline to 900 units, what would be the the net operating income?

6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income?

7. If the variable cost per unit increases by $1, spending on advertising increases by $1,500, and unit sales increase by 250 units, what would be the net operating income?

8.What is the break-even point in unit sales?

9. What is the break-even point in sales dollars?

10.How many units must be sold to acheive a target profit of $5,000.

11. What is the margin of safety in dollars? What is the margin of safety performance?

12. What is the degree of operating leverage?

13. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales?

14. Assume that the amounts of the comapny's total variable expenses and the total fixed expenses were reversed. Assume that the total variable expenses are $6,000 and the total fixed expenses are $12,000. What is the degree of operating leverage?

15. Using the degree of operating leverage that you compared in the previous question, what is the estimated percent increase in net operating income of a 5% increase in sales?

Reference no: EM13587389

Questions Cloud

On january 1 2014 ballard company spent 12000 on an asset : on january 1 2014 ballard company spent 12000 on an asset to improve its quality. the asset had been purchased on

Initial investment outlay of 25 million comprised of 20 : felicia amp freds executive board has asked you to change the decision model previously completed to reflect the

Akyl halides tend to be relatively non-polar covalent : akyl halides tend to be relatively non-polar covalent compounds. they dissolve in non-polar solvents but are insoluble

Jazz ltd purchased furniture for 300000 from bills ltd : jazz ltd. purchased furniture for 300000 from bills ltd.. 100000 were paid by drawing a promissory note in favour of

If the variable cost per unit increases by 1 spending on : oslo compnay prepared the following contribution income statement based on a sales volume of 100 units the relevant

The motor of a speed boat is shut off when it has attained : the motor of a speed boat is shut off when it has attained a speed of v0. now the boat is slowed down by a retarding

The cost of goods sold includes 2575000 of fixed : the cost of goods sold includes 2575000 of fixed manufacturing overhead the operating expenses include 270000 of fixed

At t 0 a force of the form f bt2e-lambdat is applied in : a particle of mass m is at rest at the origin of a coordinate system.nbsp at t 0 a force of the form f bt2e-lambdat

In the late 2012 the polks come to you for tax advice they : in the late 2012 the polks come to you for tax advice. they are considering selling some stocks investments for a loss

User Account

All Pages