Question

! Required information The Foundational 15 (Algo) (LO5-1, LO5-3, LO5-4, LO5-5, LO5-6, LO5-7, LO5-8] [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 $ 50,000 27,500 22,500 14,850 $ 7,650

Answer 1

Part 6	Oslo Company
	Contribution Income Statement
		Amount	Per unit	% of Sales
	Sales(900 units)	$                       46,800	$                   52.00	100.00%
	Variable Costs	$                       24,750	$                   27.50	52.88%
	Contribution Margin	$                       22,050	$                   24.50	47.12%
	Fixed Costs	$                       14,850
	Net Operating Income	$                         7,200
Part 7	Oslo Company
	Contribution Income Statement
		Amount	Per unit	% of Sales
	Sales(1,180 units)	$                       59,000	$                   50.00	100.00%
	Variable Costs($27.50+$1.00)	$                       33,630	$                   28.50	57.00%
	Contribution Margin	$                       25,370	$                   21.50	43.00%
	Fixed Costs($14,850+$1,400)	$                       16,250
	Net Operating Income	$                         9,120
Part 8	Break-even Point as per the original Income Statement =$14,850 / $22.50 =660 units
	Break-even Point as per Part 7 =$14,850 / $24.50 =606 units
	Break-even Point as per Part 8 =$16,250 / $21.50 =756 units
Part 9	Break-even Point as per the original Income Statement =$14,850 / 45% =$33,000
	Break-even Point as per Part 7 =$14,850 / 47.1115384615% =$31,518
	Break-even Point as per Part 8 =$16,250 / 43% =$37,791
Part 10	As per Original Income Statement
	Target Profit	$                       13,500
	Add:Fixed expenses	$                       14,850
	Target Contribution margin	$                       28,350
	Contribution Margin per unit	$                         22.50
	No. of units required	1260 units
	As per Part 6 Income Statement
	Target Profit	$                       13,500
	Add:Fixed expenses	$                       14,850
	Target Contribution margin	$                       28,350
	Contribution Margin per unit	$                         24.50
	No. of units required	1157 units
	As per Part 7 Income Statement
	Target Profit	$                       13,500
	Add:Fixed expenses	$                       16,250
	Target Contribution margin	$                       29,750
	Contribution Margin per unit	$                         21.50
	No. of units required	1384 units
	Note:For Part 8,9,10 it has not been mentioned that which Income statement is to be considered, Therefore I solved all three