Required information [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 Variable expenses Contribution margin Fixed expenses $ 10,000 5,500 4,500 2,250 Net operating income 2,250 12. What is the degree of operating leverage? (Round your answer to 2 decimal places.) Degree of operating leverage
Q: [The following information applies to the questions displayed below.] Oslo Company prepared the…
A: Degree of operating leverage = Contribution / Operating income
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: Answer 1. Contribution margin per unit = Total contribution / No. of units = 8000 / 1000 = 8 per…
Q: Ehrlich Enterprises prepared the following contribution format income statement based on a sales…
A: Answer 1) Calculation of Degree of Operating Leverage Degree of Operating Leverage = Contribution…
Q: Required information [The following information applies to the questions displayed below] Oslo…
A: A low DOL represents company’s variable costs are larger than its fixes cost and a high DOL…
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: Variable expense ratio is calculated by dividing the variable expense by the total sales and…
Q: The following data are given on the sole product of Silva Corporation: Unit Selling Price P 800;…
A: Formulas: Break even sales (Units) = Fixed costs / Contribution Margin per unit Break even sales…
Q: income statement based on a sales volume of 1,000 units (the relevant range of production is 500…
A: The operating leverage is calculated as contribution margin divided by EBIT.
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: Since you have asked a question with multiple sub parts, we will answer the first 3 sub parts for…
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: Contribution margin ratio = (Contribution margin / sales) x 100 = (13500/45000)*100 = 30%
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: Contribution is the amount of earnings left after deducting all direct costs from the revenue from…
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: The operating leverage indicates a level at which the business entity can increase its income by…
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: The facts in the given question are as follows: Sales- $30,000 Variable expenses- 16,500…
Q: Required information [The following information applies to the questions displayed below.] Oslo…
A: Operating income: Income statement reports revenues and expenses from business operations, and the…
Q: Below is the contribution format income statement for a company based on a sales volume of 1,000…
A: Solution: Current CM per unit = $22,000 / 1000 = $22 per unit New CM per unit = $22 - $1 = $21 per…
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: Cost accounting is one of the branches of accounting. Under this branch, all types of costs and…
Q: Required information [The following information applies to the questions displayed below.] Oslo…
A: Selling price per unit: It is the price at which a unit of product is sold in the market. Variable…
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A:
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: The margin of safety is the excess value of the amount the firm earns over its break-even sales. It…
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: >Degree of Operating Leverage measure how much the net operating income is sensitive to the…
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: The margin of safety is part of cost volume profit analysis. It indicates the actors of actual sales…
Q: Oslo company prepared the following contrubition format income statement based on a sales volume of…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: 1. Break Even Point - Break even point is the point where company is in a position at which there is…
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: Contribution margin: Difference between the sales and the variable costs is called contribution…
Q: Required information [The following information applies to the questions displayed below] Oslo…
A: Cost-Volume-Profit (CVP) Analysis: It is a method followed to analyze the relationship between the…
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: Solution: new contribution margin = sales - variable costs = 20000 - 6000 = 14,000 net operating…
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: Degree of operating leverage = Total contribution margin / Net Operating income
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: Contribution margin ratio is the difference between company's sales and variable cost, expressed as…
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: Break-even analysis is a technique used widely by the production management. It helps to determine…
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: Contribution margin is the amount of revenue or sales which is left after deducting variable…
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: Formula: Degree of operating leverage = Contribution margin / Net operating income.
Q: slo Company prepared the following contribution format income statement based on a sales volume of…
A: Variable Cost - The total cost of production of a good comprises of the total fixed cost of…
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: SOLUTION CONTRIBUTION MARGIN PER UNIT = SELLING PRICE PER UNIT - VARIABLE COST PER UNIT . = 70-38.5…
Q: Required information [The following information applies to the questions displayed below.] Oslo…
A: Contribution: The term contribution or contribution margin in costing is the sales less variable…
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: Degree of operating leverage = Contribution margin / Net operating income = $35000/4900 = 7.14
Q: Current operating income for Bay Area Cycles Co. is $22,000. Selling price per unit is $100, the…
A: Break even sales is that level of sale at which there is no profit and loss and the margin of safety…
Q: 1- If you know that net sales are 60,000, fixed expenses 20,000, and cost of sales 30,000, then the…
A: Degree of operating leverage measures the change in the operating income if the sales change.…
Q: Required information [The following information applies to the questions displayed below.] Oslo…
A: Cost-volume profit analysis is a tool that helps in decision making by establishing a relationship…
Q: Required information [The following information applies to the questions displayed below.] Oslo…
A: Break-even point is that point at which a company is making no profit no loss. In other words at…
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: Cost volume profit analysis is the technique used by the management for decision-making. The methods…
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: Total Contribution margin = $8,000 Sales volume = 1,000 units
Q: Hei Below is the contribution format income statement for a company based on a sales volume of 1,000…
A:
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: Solution: - Calculation of revised values as follows under: -
Q: Required information [The following information applies to the questions displayed below] Oslo…
A: Working notes:
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: The break even sales are the sales where business earns no profit no loss during the period.
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: Information given in the question is as follows: Sales $ 30,000 Variable expenses 16,500…
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: Degree of operating leverage (DOL): DOL reflects the variable and fixed cost relationship of an…
Q: Required information [The following information applies to the questions displayed below.] Oslo…
A: Operating leverage: Operating leverage refers to the measurement of the degree of the variable and…
Q: Required information [The following information applies to the questions displayed below.] Oslo…
A:
Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…
A: The degree of operating leverage can be defined as the accounting measure that is used to identify…
Q: Nocum Corporation has provided the following contribution format income statement. Assume that the…
A: Contribution margin per unit = contribution margin / no. Of units sold = $30000/3000 units = $10…
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- Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett allocates common fixed cost to Product 1 and Product 2 on the basis of sales. If Product 2 is dropped, which of the following is true? a. Sales will increase by 300,000. b. Overall operating income will increase by 2,600. c. Overall operating income will decrease by 25,000. d. Overall operating income will not change. e. Common fixed cost will decrease by 27,600.Morrill Company produces two different types of gauges: a density gauge and a thickness gauge. The segmented income statement for a typical quarter follows. Includes depreciation. The density gauge uses a subassembly that is purchased from an external supplier for 25 per unit. Each quarter, 2,000 subassemblies are purchased. All units produced are sold, and there are no ending inventories of subassemblies. Morrill is considering making the subassembly rather than buying it. Unit-level variable manufacturing costs are as follows: No significant non-unit-level costs are incurred. Morrill is considering two alternatives to supply the productive capacity for the subassembly. 1. Lease the needed space and equipment at a cost of 27,000 per quarter for the space and 10,000 per quarter for a supervisor. There are no other fixed expenses. 2. Drop the thickness gauge. The equipment could be adapted with virtually no cost and the existing space utilized to produce the subassembly. The direct fixed expenses, including supervision, would be 38,000, 8,000 of which is depreciation on equipment. If the thickness gauge is dropped, sales of the density gauge will not be affected. Required: 1. Should Morrill Company make or buy the subassembly? If it makes the subassembly, which alternative should be chosen? Explain and provide supporting computations. 2. Suppose that dropping the thickness gauge will decrease sales of the density gauge by 10 percent. What effect does this have on the decision? 3. Assume that dropping the thickness gauge decreases sales of the density gauge by 10 percent and that 2,800 subassemblies are required per quarter. As before, assume that there are no ending inventories of subassemblies and that all units produced are sold. Assume also that the per-unit sales price and variable costs are the same as in Requirement 1. Include the leasing alternative in your consideration. Now, what is the correct decision?Use the following information for Multiple-Choice Questions 2-3 and 2-4: Wachman Company produces a product with the following per-unit costs: Last year, Wachman produced and sold 2,000 units at a price of 75 each. Total selling and administrative expense was 30,000. 2-3Refer to the information for Wachman Company on the previous page. Conversion cost per unit was a. 21. b. 25. c. 34. d. 40. e. None of these.
- Thomas Corporation produces heating units. The following values apply for a part used in their production (purchased from external suppliers): D = 12,500 Q = 250 P = 45 C = 4.50 Required: 1. For Thomas, calculate the ordering cost, the carrying cost, and the total cost associated with an order size of 250 units. 2. Calculate the EOQ and its associated ordering cost, carrying cost, and total cost. Compare and comment on the EOQ relative to the current order quantity. 3. What if Thomas enters into an exclusive supplier agreement with one supplier who will supply all of the demands with smaller, more frequent orders? Under this arrangement, the ordering cost is reduced to 0.45 per order. Calculate the new EOQ and comment on the implications.Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is 6. Total fixed cost is 10,000. Required: 1. Prepare a CVP graph with Units Sold as the horizontal axis and Dollars as the vertical axis. Label the break-even point on the horizontal axis. 2. Prepare CVP graphs for each of the following independent scenarios: (a) Fixed cost increases by 5,000, (b) Unit variable cost increases to 7, (c) Unit selling price increases to 12, and (d) Fixed cost increases by 5,000 and unit variable cost is 7.Contribution margin, break-even sales, cost-volume-profit chart, margin of safety, and operating leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: It is expected that 12,000 units will be sold at a price of 240 a unit. Maximum sales within the relevant range are 18,000 units. Instructions 1. Prepare an estimated income statement for 20Y7. 2. What is the expected contribution margin ratio? 3. Determine the break-even sales in units and dollars. 4. Construct a cost-volume-profit chart indicating the break-even sales. 5. What is the expected margin of safety in dollars and as a percentage of sales? (Round to one decimal place.) 6. Determine the operating leverage.
- Product cost concept of product pricing Based on the data presented in Exercise 12-15, assume that Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing. a.Determine the total manufacturing costs and the cost amount per unit for the production and sale of 200,000 units. b.Determine the product cost markup percentage per unit. Round to two decimal place. c.Determine the selling price per unit. Round to the nearest dollar.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. 2-14Refer to the information for Barnard Company above. Conversion cost per unit is a. 7.00. b. 20.00. c. 15.00. d. 5.00. e. 27.60.Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects to sell 28,700 units at 32 each. Kallings controller provided the following information for the coming year: Required: 1. Calculate the cost of one unit of product under absorption costing. 2. Calculate the cost of one unit of product under variable costing. 3. Calculate operating income under absorption costing for next year. 4. Calculate operating income under variable costing for next year.
- The following product Costs are available for Haworth Company on the production of chairs: direct materials, $15,500; direct labor, $22.000; manufacturing overhead, $16.500; selling expenses, $6,900; and administrative expenses, $15,200. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 7,750 equivalent units are produced, what is the equivalent material cost per unit? If 22,000 equivalent units are produced, what is the equivalent conversion cost per unit?Required information Skip to question [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 13. Using the degree of operating leverage, what is the estimated percent increase in net operating income that would result from a 5% increase in unit sales? (Round your intermediate calculations and final answer to 2 decimal places.) 14. 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 $23,310 and the total fixed expenses are $38,500. Under this scenario and assuming that total sales remain the same, what is the degree of operating leverage? (Round your…[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?