Check my work 6 Required Informetion [The following Information appliles to the
ID: 2529605 • Letter: C
Question
Check my work 6 Required Informetion [The following Information appliles to the questions displayed below,J Oslo Company prepared the following contribution format Income statement based on a sales Part 6 of 15 volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): 0.58 points Sales Variable expense:s Contribution margin Fixed expenses Net operating income s1ee,eee 35,ee0 30,1ee $ 4,9ee eBook 6. If the selling price Increases by $2 per unlit and the sales volume decreases by 100 units, what would be the net operating Income? Print t operating incomeS 34,700Explanation / Answer
Solution:
Current selling price = $100,000 / 1000 = $100 per unit
If selling price increased by $2 then new selling price = $102
New Sales volume = 1000 -100 = 900 units
Variable cost per unit = $65,000 / 1000 = $65
New Contribution per unit = $102 - $65 = $37 per unit
Toral contribution margin after increase in selling price = 900 * $37 = $33,300
Fixed cost = $30,100
Net Operating income = Contribution - Fixed expenses = $33,300 - $30,100 = $3,200