Miller Company’s contribution format income statement for the most recent month is shown below:
Total | Per Unit | |||||
Sales (37,000 units) | $ | 296,000 | $ | 8.00 | ||
Variable expenses | 185,000 | 5.00 | ||||
Contribution margin | 111,000 | $ | 3.00 | |||
Fixed expenses | 42,000 | |||||
Net operating income | $ | 69,000 | ||||
Required:
(Consider each case independently):
1. What is the revised net operating income if unit sales increase by 15%?
2. What is the revised net operating income if the selling price decreases by $1.40 per unit and the number of units sold increases by 21%?
3. What is the revised net operating income if the selling price increases by $1.40 per unit, fixed expenses increase by $9,000, and the number of units sold decreases by 6%?
4. What is the revised net operating income if the selling price per unit increases by 10%, variable expenses increase by 20 cents per unit, and the number of units sold decreases by 8%?
1 | ||
Total | Per unit | |
Sales (42,550 units) | 340400 | 8.00 |
Variable expenses | 212750 | 5.00 |
Contribution margin | 127650 | 3.00 |
Fixed expenses | 42000 | |
Revised Net operating income | 85650 | |
2 | ||
Total | Per unit | |
Sales (44,770 units) | 295482 | 6.60 |
Variable expenses | 223850 | 5.00 |
Contribution margin | 71632 | 1.60 |
Fixed expenses | 42000 | |
Revised Net operating income | 29632 | |
3 | ||
Total | Per unit | |
Sales (34,780 units) | 326932 | 9.40 |
Variable expenses | 173900 | 5.00 |
Contribution margin | 153032 | 4.40 |
Fixed expenses | 51000 | |
Revised Net operating income | 102032 | |
4 | ||
Total | Per unit | |
Sales (34,040 units) | 299552 | 8.80 |
Variable expenses | 177008 | 5.20 |
Contribution margin | 122544 | 3.60 |
Fixed expenses | 42000 | |
Revised Net operating income | 80544 |
Miller Company’s contribution format income statement for the most recent month is shown below: Total Per...
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