Oslo Company prepared the following contribution format income statem (2).docx

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Solution Contribution for 1000 Units = $8000 Contribution Per Unit = $8000/1000 = $8 per unit. Now, Contribution for 1001 unit= 1000 x $8 = $8008 Less: Fixed Cost ( it wont change with increase in units)= $6000. Net Operating Profit = $2008 Therefore, Increase in operating income is $8. .

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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):
Solution
Contribution for 1000 Units = $8000
Contribution Per Unit = $8000/1000 = $8 per unit.
Now,
Contribution for 1001 unit= 1000 x $8 = $8008
Less: Fixed Cost ( it wont change with increase in units)= $6000.
Net Operating Profit = $2008
Therefore, Increase in operating income is $8.

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