Question

6. If the selling price increases by 51.50 per unit and the sales volume decreases by 100 is what would be the net operating Income (Deerd intermediate calculations Required Information The following formation to the we b References eBook & Resources Oslo Company prepared the following contribution to a les volume of 1,000 units the relevantage of UNIS com m ent based on con 500 1,500 Worksheet Leaming Objective: 03-03 Use the contribution margin ratio (CM ratio) to compute changes in contribution margin and net operating income resulting from changes in sales volume $25,700 Sales Vare expenses Difficulty: 2 Medium Learning Objective: 05-04 Show the effects on net operating income of changes in variable costs, fixed costs, selling price, and volume Contribution margin Fived expenses Net operating income Learning Objective: 03-05 Determine the break; even point Learning Objective: 03-01 Explain how changes in activity affect contribution margin and net operating income.

Answer 1

Ans: Net operating income = (Number of units sold - decreasing units sold){total sales/ no of units sold + increasing price}- {Variable expense/ Number of units sold }-fixed expense

= (1000 - 100) {25700/1000+1.60)-(13,900/1000)-7,788

=( 900){ 25.7+1.60- 13.90)-7,788

=(900( 27.30-13.90)-7,788

= 900*13.40-7,788

= $12,060-7,788

= $ 4,272