FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Oslo company prepared the following contrubition format income statement based on a sales volume of 1,000 unites (the relevant range of production is 500 units to 1,500 units). 

Sales.... $20,000

Variable expenses ... 12,000

Contribution margin .... 8,000

Fixed expenses ... 6,000

Net operating income... $2,000

 

4) If the sales increase to 1,001 units, what would be the increase in net operating income ? 

5) If sales decline to 900 units , what would be the net operating income? 

6) If selling price increases by $2 per unit and the sales volume decreases by 100 units , what would be the net operating income ?

 

Expert Solution
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Step 1

Net operating income is the measure of the profit of the business that reports on its income statement. And it equals to the aggregate operating revenue less aggregate operating expenses.

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