6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income? Net operating income
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- Olivian Company wants to earn 420,000 in net (after-tax) income next year. Its product is priced at 275 per unit. Product costs include: Variable selling expense is 14 per unit; fixed selling and administrative expense totals 290,000. Olivian has a tax rate of 40 percent. Required: 1. Calculate the before-tax profit needed to achieve an after-tax target of 420,000. 2. Calculate the number of units that will yield operating income calculated in Requirement 1 above. (Round to the nearest unit.) 3. Prepare an income statement for Olivian Company for the coming year based on the number of units computed in Requirement 2. 4. What if Olivian had a 35 percent tax rate? Would the units sold to reach a 420,000 target net income be higher or lower than the units calculated in Requirement 3? Calculate the number of units needed at the new tax rate. (Round dollar amounts to the nearest dollar and unit amounts to the nearest unit.)Use the following information for Multiple-Choice Questions 2-13 through 2-18: Last year, Barnard Company incurred the following costs: Barnard produced and sold 10,000 units at a price of 31 each. 2-13Refer to the information for Barnard Company above. Prime cost per unit is a. 7.00. b. 20.00. c. 15.00. d. 5.00. e. 27.60.Use the following information for Multiple-Choice Questions 2-13 through 2-18: Last year, Barnard Company incurred the following costs: Barnard produced and sold 10,000 units at a price of 31 each. 2-17 Refer to the information for Barnard Company on the previous page. The total period expense is a. 276,000. b. 200,000. c. 76,000. d. 40,000. e. 36,000.
- The production of a new product required Zion Manufacturing Co. to lease additional plant facilities. Based on studies, the following data have been made available: Estimated annual sales24,000 units Selling expenses are expected to be 5% of sales, and net income is to amount to 2.00 per unit. Required: 1. Calculate the selling price per unit. (Hint: Let X equal the selling price and express selling expense as a percentage of X.) 2. Prepare an absorption costing income statement for the year ended December 31, 2016. 3. Calculate the break-even point expressed in dollars and in units, assuming that administrative expense and factory overhead are all fixed but other costs are fully variable.[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 $ 70,000 Variable expenses 38,500 Contribution margin 31,500 Fixed expenses 23,310 Net operating income $ 8,190 4. If sales increase to 1,001 units, what would be the increase in net operating income? (Round your answer to 2 decimal places.) 6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income? 7. If the variable cost per unit increases by $1, spending on advertising increases by $1,600, and unit sales increase by 220 units, what would be the net operating income?Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales$ 55,000Variable expenses33,000Contribution margin22,000Fixed expenses14,960Net operating income$ 7,04015. Assume that the amounts of the company’s total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $14,960 and the total fixed expenses are $33,000. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in unit sales? (Round your intermediate calculations and final answer to 2 decimal places.)
- Miller Company’s most recent contribution format income statement is shown below:Total Per UnitSales (20,000 units) ............................. $300,000 $15.00Variable expenses ............................... 180,000 9.00Contribution margin ............................. 120,000 $ 6.00Fixed expenses ................................... 70,000Net operating income .......................... $ 50,000Required:Prepare a new contribution format income statement under each of the following conditions (consider eachcase independently):1. The number of units sold increases by 15%.2. The selling price decreases by $1.50 per unit, and the number of units sold increases by 25%.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 $ 100,000 Variable expenses 65,000 Contribution margin 35,000 Fixed expenses 30,100 Net operating income $ 4,900 13. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales? (Round your intermediate calculations and final answer to 2 decimal places.)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 Questions: A) If sales increase to 1,001 units, what would be the increase in net operating income? (Round your answer to 2 decimal places.) B) If sales decline to 900 units, what would be the net operating income? C) If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income? (SAME DATA AS ATTACHED PICS- SUBMISSION BOX WOULDN'T ALLOW FOR MORE THAN 2 ATTACHMENTS)
- The Mariachi Company prepared the following contribution format income statement based on a sales volume of 1,200 units (the relevant range of production is 500 units to 2,000 units): Sales 26,400Variable expenses 18,000Contribution margin 8,400Fixed expenses 6,200Net operating income 2,200 What is the break-even point in dollar sales?[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 $ 70,000 Variable expenses 38,500 Contribution margin 31,500 Fixed expenses 23,310 Net operating income $ 8,190 5. If sales decline to 900 units, what would be the net operating income? 6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income? 7. If the variable cost per unit increases by $1, spending on advertising increases by $1,600, and unit sales increase by 220 units, what would be the net operating income? 8. What is the break-even point in unit sales?[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 $ 100,000 Variable expenses 65,000 Contribution margin 35,000 Fixed expenses 30,100 Net operating income $ 4,900 12. What is the degree of operating leverage?