Question

Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (7,300 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 219,000 138,700 80,300 55, 900 $ 24,400 Per Unit $ 30.00 19.00 $ 11.00 Book Required: (Consider each case independently): rences 1. What would be the revised net operating income per month if the sales volume increases by 60 units? 2. What would be the revised net operating income per month if the sales volume decreases by 60 units? 3. What would be the revised net operating income per month if the sales volume is 6,300 units? 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income

Answer 1

1. When sales volume increase by 60 units

	Total	Per unit
Sales ( 7,360 x 30)	220,800	30
Variable cost (7,360 x 19)	139,840	19
Contribution Margin	80,960	11
Fixed cost	55,900
Net operating Income	$25,060

2. When sales volume decrease by 60 units

	Total	Per unit
Sales ( 7,240 x 30)	217,200	30
Variable cost (7,240 x 19)	137,560	19
Contribution Margin	79,640	11
Fixed cost	55,900
Net operating Income	$23,740

3.

When sales volume is 6,300 units

	Total	Per unit
Sales ( 6,300 x 30)	189,000	30
Variable cost (6,300 x 19)	119,700	19
Contribution Margin	69,300	11
Fixed cost	55,900
Net operating Income	$13,400

1.	Revised net operating income	$25,060
2.	Revised net operating income	$23,740
3.	Revised net operating income	$13,400

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