Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,000

Variable expenses . . . . . . . . . . . . . . . . . . . . . . . 12,000

Contribution margin . . . . . . . . . . . . . . . . . . . . . . 8,000

Fixed expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000

Net operating income . . . . . . . . . . . . . . . . . . . . . $ 2,000

1. If sales decline to 900 units, what would be the net operating income?

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

3. If the variable cost per unit increases by $ 1, spending on advertising increases by $ 1,500, and unit sales increase by 250 units, what would be the net operating income?

For questions 1-3: (Please use the formats below to display answer)

Units

Per unit

Sales

Variable expenses

Contribution margin

Fixed expenses

Net operating income

Question 4: What is the break- even point in unit sales?

Profit = Unit CM X Q - Fixed expenses

= units

Question 5: What is the break- even point in dollar sales?

Profit = CM ration X Sales - Fixed Expenses

=

Question 6: How many units must be sold to achieve a target profit of $ 5,000?

Profit = Unit CM X Q - Fixed expenses

= Units

Question 7: What is the margin of safety in dollars? What is the margin of safety percentage?

Sales

Break-even sales at units

Margin of safety (in dollars)

Margin of safety (in dollars)

Sales

Margin of safety percentage

Question 8: What is the degree of operating leverage?

Contribution margin

Net operating income

Degree of operating leverage

Question 9: Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales?

Degree of operating leverage

% increase in sales

% increase in net operating income

Question 10: Assume that the amounts of the company