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 $ 25,000 Variable expenses 17,500 Contribution margin 7,500 Fixed expenses 4,200 Net operating income $ 3,300 8. What is the break-even point in unit sales? 9. What is the break-even point in dollar sales? 10. How many units must be sold to achieve a target profit of $4,500?
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 $ 25,000 Variable expenses 17,500 Contribution margin 7,500 Fixed expenses 4,200 Net operating income $ 3,300 8. What is the break-even point in unit sales? 9. What is the break-even point in dollar sales? 10. How many units must be sold to achieve a target profit of $4,500?
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 4PB: West Island distributes a single product. The companys sales and expenses for the month of June are...
Related questions
Question
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 | $ | 25,000 |
Variable expenses | 17,500 | |
Contribution margin | 7,500 | |
Fixed expenses | 4,200 | |
Net operating income | $ | 3,300 |
8. What is the break-even point in unit sales?
9. What is the break-even point in dollar sales?
10. How many units must be sold to achieve a target profit of $4,500?
Expert Solution
Step 1
Break-even analysis is a technique used widely by the production management. It helps to determine the units to be sold to recover the total cost. It also helps to set the price of the product. Break-even analysis includes contribution margin, break-even, profit volume ratio etc.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College