Question

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 $ 10,000 Variable expenses 5,500 Contribution margin 4,500 Fixed expenses 2,250 Net operating income $ 2,250 5. If sales decline to 900 units, what would be the net operating inc

Answer 1

Answer:

The answer is "$1,800".

Explanation:

Given value:

$Sales = \ 10,000 \\\\Variable \ expenses = 5,500\\\\ Contribution\ margin= 4,500\\\\ Fixed \ expenses= 2,250\\\\ Net \ operating \ income = \ 2,250$

Solution:

$Particulars \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ Amount \\\\ Sales = (900 \times \ 10) = \ 9,000 \\\\Variable\ expenses = (900 \times \ 5.50)= -\ 4,950 \\\\Contribution\ margin = \ 4,050 \\\\Fixed \ expenses = -\ 2,250 \\\\Net \ operating \ income = \ 1,800$

At this revenue pace (900 units), the net operating income is going to be $1,800.