Question

Miller Company's most recent contribution format income statement is shown below: Sales (32.000 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $224,000 128,000 96,000 47,000 $ 49,000 Per Unit $7.00 4.00 $3.00 Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently): (Do not round intermediate calculations. Round your "Per unit" answers to 2 decimal places.) 1. The number of units sold increases by 12%. Per Unit Miller Company Contribution Income Statement Total Sales Variable expenses Contribution margin Fixed expenses Net operating income 0 $ 0.00

Answer 1

1)		Contribution income statement
				Total	per unit
	Sales			250880	7
	variable expenses			143360	4
	Contribution margin			107520	3
	fixed expenses			47,000
	Net operating income			60,520
2)		Contribution income statement
				Total	per unit
	Sales			226560	5.9
	variable expenses			153600	4
	Contribution margin			72960	1.9
	fixed expenses			47,000
	Net operating income			25,960
3)
		Contribution income statement
				Total	per unit
	Sales			241056	8.1
	variable expenses			119040	4
	Contribution margin			122016	4.1
	fixed expenses			55,000
	Net operating income			67,016
4)
		Contribution income statement
				Total	per unit
	Sales			231616	7.7
	variable expenses			144384	4.8
	Contribution margin			87232	2.9
	fixed expenses			47,000
	Net operating income			40,232

working notes

1)
	Sale units	(32000*112%)=			35840
	contribution margin per unit				3
	total contribution margin				107520
	less:fixed expense				47,000
	Net operating income				60,520
2)
	Sale units	(32000*120%)=			38400
	contribution margin per unit			(3-1.10)=	1.9
	total contribution margin				72960
	less:fixed expense				47,000
	Net operating income				25,960
3)
	Sale units	(32000*93%)=			29760
	contribution margin per unit			(3+1.10)=	4.1
	total contribution margin				122016
	less:fixed expense				55,000
	Net operating income				67,016
4)	Selling price per unit		(7*110%)=		7.7
	varible expense		(4*120%)		4.8
	contribution margin per unit				2.9
	Sale units	(32000*94%)=			30080
	contribution margin per unit				2.9
	total contribution margin				87232
	less:fixed expense				47,000
	Net operating income				40,232