Question

Please help in answering these questions.

1 Required information /The following information applies to the questions displayed below. relevant range of production is 500 units to 1,500 units) Oslo Company prepared the folowing contribution format income statement based on a sales volume of 100 units (the Sales Variable expenses Contribution margin Fixed expenses Net operating income $25,8ee 17,50e 7,5e0 4,200 $ 3,300 1, If the variable cost per unit increases by St. spending on advertising increases by $1,150, and unit sales increase by 130 units,what would be the net operating income?

Answer 1

	7)	net operating income				1,995
		contribution		(1,130*6.50)		7345
		less :Fixed expense				-5,350
		Net operating income				1995
	8)	Break-even point				560	units
		(fixed cost/contribuion per unit)
		4200/7.5
	9)	Break even point				14000
		(560*25)
	10)	Number of units				1160	units
		(fixed cost+target profit)/contribution per unit
		margin of safety in dollars				11000
		(actual sales - BEP sales)
		(25000-14000)
	11)	Margin of safety percentage				44%
		(margin of safety/actual sales)
	12)	Degree of operating leverage				2.27
		contibution /net income
	13)	increase in net operating income				11.35	%
		(2.27*5)
	14)	degree of operating leverage				6.30
		sales				25,000
		less variable expense				4,200
		contribution				20,800
		less fixed expense				17,500
		net income				3,300