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 $ 50,000 Variable expenses 27,500 Contribution margin 22,500 Fixed expenses 14,850 Net operating income $ 7,650   Required: 1. What is the contribution margin per unit? (Round your answer to 2 decimal places.)

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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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 $ 50,000
Variable expenses 27,500
Contribution margin 22,500
Fixed expenses 14,850
Net operating income $ 7,650

 

Required:

1. What is the contribution margin per unit? (Round your answer to 2 decimal places.)

 

 
 
 
 
Expert Solution
Step 1

Income Statement :— It is one of the financial statement that shows profitability of company during the period.

 

Variable Cost :— It is the cost that changes with change in units. It is constant in per unit.

 

Contribution Margin :— It is the difference of sales value and total variable cost.

 

Contribution Margin Per Unit :— It is calculated by dividing contribution margin by units sold.

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