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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 $ 20,000 Variable expenses 13,000 Contribution margin 7,000 Fixed expenses 3,780 Net operating income $3,220 Foundational 2-7 (Algo) Required: 7. If the variable cost per unit increases by $1, spending on advertising increases by $1,100, and unit sales increase by 120 units, what would be the net operating income?

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 $ 20,000 Variable expenses 13,000 Contribution margin 7,000 Fixed expenses 3,780 Net operating income $3,220 Foundational 2-7 (Algo) Required: 7. If the variable cost per unit increases by $1, spending on advertising increases by $1,100, and unit sales increase by 120 units, what would be the net operating income?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 $ 20,000 Variable expenses 13,000 Contribution margin 7,000 Fixed expenses 3,780 Net operating income $ 3,220 Foundational 2-7 (Algo) Required: 7. If the variable cost per unit increases by $1, spending on advertising increases by $1,100, and unit sales increase by 120 units, what would be the net operating income?
Transcribed Image Text: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 $ 20,000 Variable expenses 13,000 Contribution margin 7,000 Fixed expenses 3,780 Net operating income $ 3,220 Foundational 2-7 (Algo) Required: 7. If the variable cost per unit increases by $1, spending on advertising increases by $1,100, and unit sales increase by 120 units, what would be the net operating income?
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