Question

napter 3HW Question 2 (of 5) 2. value 3.00 points Miller Company's most recent contribution format income statement is shown below Total Per Unit Sales (40,000 units) Variable expenses Contribution margin Fixed expenses Net operating income $280,000 $7.00 4.00 120,000 $3.00 160,000 49,000 S 71,000 Required Prepare a new contribution format income statement under each of the following conditions (consider each case indepe "Per unit" answers to 2 decimal places.) 1. The number of units sold increases by 11%.

Answer 1

1.

Miller Company
Contribution Income Statement
	Total	Per Unit
Sales (44400 units)	310800	$       7.00
Variable expenses	177600	4.00
Contribution margin	133200	$       3.00
Fixed expenses	49000
Net operating income	84200

Number of units sold = 40000 x 1.11 = 44400

2.

Miller Company
Contribution Income Statement
	Total	Per Unit
Sales (48000 units)	278400	$       5.80
Variable expenses	192000	4.00
Contribution margin	86400	$       1.80
Fixed expenses	49000
Net operating income	37400

Selling price = $7.00 - $1.20 = $5.80

Number of units sold = 40000 x 1.2 = 48000

3.

Miller Company
Contribution Income Statement
	Total	Per Unit
Sales (38800 units)	318160	$       8.20
Variable expenses	155200	4.00
Contribution margin	162960	$       4.20
Fixed expenses	57000
Net operating income	105960

Selling price = $7.00 + $1.20 = $8.20

Fixed expenses = $49000 + $8000 = $57000

Number of units sold = 40000 x 0.97 = 38800

4.

Miller Company
Contribution Income Statement
	Total	Per Unit
Sales (36000 units)	277200	$       7.70
Variable expenses	154800	4.30
Contribution margin	122400	$       3.40
Fixed expenses	49000
Net operating income	73400

Selling price = $7.00 x 1.10 = $7.70

Variable expenses = $4.00 + $0.30 = $4.30

Number of units sold = 40000 x 0.90 = 36000