Question

Exercise 3-1 Preparing a Contribution Format Income Statement [LO3-1] Whirly Corporation's most recent income statement is shown below: Total Per Unit Sales (7.600 units) $243,200 $32.00 Variable expenses 144.400 19.00 Contribution margin 98,800 $13.00 Fixed expenses 54,400 Net operating $ 44,400 income Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently): 1. The sales volume increases by 50 units. Whirly Corporation Contribution Income Statement Total Per Unit 2. The sales volume decreases by 50 units. Whirly Corporation Contribution Income Statement Total Per Unit 3. The sales volume is 6,600 units. Whirly Corporation Contribution Income Statement Total Per Unit

Answer 1

Requirement: 1 Whirl Cororation Contribution Income statement Total Per Unit Sales (7650 * 32) 244800 Less: Variable cost ( 7650 * 19) 145350 Contribution Margin 99450 Less: Fixed expenses 54400 Revised Net operating income 45050 Requirement: 2 Whirl Cororation Contribution Income statement Total Per Unit Sales (7550 * 32) 241600 Less: Variable cost (7550 * 19) 143450 19 Contribution Margin 98150 13 Less: Fixed expenses 54400 Revised Net operating income 43750

Per Unit Requirement: 3 Whirl Cororation Contribution Income statement Total Sales (6600 *32) 211200 Less: Variable cost (6600 * 19) 125400 Contribution Margin 85800 Less: Fixed expenses 54400 Revised Net operating income 31400