Question

Required information The Foundational 15 (LO6-1, LO6-3, LO6-4, LO6-5, LO6-6, LO6-7, LO6-8] [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 $ 25,000 17,500 7,500 4,200 $ 3,300 Foundational 6-7 7. If the variable cost per unit increases by $1, spending on advertising increases by $1,150, and unit sales increase by 130 units, what would be the net operating income? Net operating income

Answer 1

Net operating income	1,995.00
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Statementshowing Computations
Paticulars	Amount	Per Unit
Sales	25,000.00	25.00
Less Variable Expenses	(17,500.00)	(17.50)
Contribution Margin	7,500.00	7.50
Fixed cost	(4,200.00)
Net operating income	3,300.00
7)
Paticulars	Amount for 1,130 Units	Per Unit
Sales	28,250.00	25.00
Less Variable Expenses Per Unit =17.50 + 1	(20,905.00)	(18.50)
Contribution Margin	7,345.00	6.50
Fixed cost = 4200 + 1150	(5,350.00)
Net operating income	1,995.00