Question

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 Net operating income $ 65,000 45,500 19,500 14.40 $ 5,460 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? Not operating income

Answer 1

Calculation of net operating income is shown below
Sales price per unit (65,000/1000)	$65.00
Variable expenses (45,500/1000)	$45.50
Sales (900*67)	$60,300
Variable expenses (900*45.50)	$40,950
Contribution margin	$19,350
Fixed expenses	$14,040
Net operating income	$5,310
Thus, net operating income is $5,310