Reference no: EM131261464
Olso 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 in units......5,000
Sales dollars......50,000
Variable expense......15,000
Contribution margin......35,000
Fixed expenses......30,000
Net operating income......5,000
1. What is the contribution margin per unit?
2. What is the contribution margin ratio?
3. What is the variable expense ratio?
4. If sales increase to 1,001 units, what would be the increase in net operating income?
5. If sales declined to 900 units, what would be 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 achieve a target profit of $5,000?
11. What is the margin of safety in dollars? What is the margin of safety percentage?
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 company's total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $6,000 and the total fixed expenses are $12,000. Under this scenario and assuming that total sales remain the same, what is the degree of operating leverage?
15. Using the degree of operating leverage that you computed in the previous question, what is the estimated percent increase in net operating income of a 5% increase in sales?
Compute the inventory turnover
: Compute the inventory turnover and? days' sales in inventory using the corrected income statement for the three years.?
|
Campaigns are debited to the cost of services account
: At the end of August, both the Vault Bank and Take Off Airlines campaigns were completed. The costs of completed campaigns are debited to the cost of services account. Required: Journalize the four summary entries on August 31 to record each of the f..
|
Average beta of the new stocks added to the portfolio
: A mutual fund manager has a $20 million portfolio with a beta of 0.75. The risk-free rate is 5.00%, and the market risk premium is 5.5%. The manager expects to receive an additional $5 million, which she plans to invest in a number of stocks. After i..
|
After reading about global business
: After reading about global business - what would you say are the two biggest challenges for any company that wants to be a global contender? How might a company overcome these challenges? Do you think all companies today should have a global presence..
|
What is contribution margin ratio and variable expense ratio
: Olso 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 in units......5,000. What is the contribution margin per unit? What ..
|
Required return on index fund that holds entire stock market
: Beale Manufacturing Company has a beta of 2.2, and Foley Industries has a beta of 0.5. The required return on an index fund that holds the entire stock market is 9.5%. The risk-free rate of interest is 3.25%. By how much does Beale's required return ..
|
Determine net income under the accrual basis of accounting
: Given the data below for a firm in its first year of operation, determine net income under the accrual basis of accounting.
|
The ending total of all stockholders equity accounts
: Wildhorse Co. began the year with $136100 in its Common Stock account and a debit balance in Retained Earnings of $58300. During the year, the company earned net income of $29200 and declared and paid $9700 of dividends. what should the transaction a..
|
How do you prepare current liabilities section
: What have we learned from classical management thinking? How do you prepare Current liabilities section of Kruse's 2014 balance sheet? Commenta have been made as to the positive and negative aspects of frederick taylor's teachings.
|