Question

- Miller Company's contribution format income statement for the most recent month is shown below. Total Sales (35.000 units) Variable expenses Contribution nargin Fixed expenses Net operating income $ 280,000 175.000 105.000 49.000 $ 56,000 Per Unit $8.00 5.00 $3.00 04.01:10 ebook Required: (Consider each case independently): 1. What is the revised net operating income if unit sales increase by 19%? 2. What is the revised net operating income if the selling price decreases by $1,30 per unit and the number of units sold increases by 22%? 3. What is the revised net operating income if the selling price increases by $1.30 per unit, fixed expenses increase by $8,000, and the number of units sold decreases by 3%? 4. What is the revised net operating income if the selling price per unit increases by 20% variable expenses increase by 30 cents per unit, and the number of units sold decreases by 6%? Peint References 1. Net operating income 2. Net operating income 3 Net operating income 4. Net operating income

Answer 1

1]		Total	Per Unit
	Sales [36000*119% = 42840]	$      3,42,720	$               8.00
	Variable expenses	$      2,14,200	$               5.00
	Contribution margin	$      1,28,520	$               3.00
	Fixed expenses	$          49,000
	Net operating income	$          79,520
2]		Total	Per Unit
	Sales [36000*122% = 43920]	$      2,94,264	$               6.70
	Variable expenses	$      2,19,600	$               5.00
	Contribution margin	$          74,664	$               1.70
	Fixed expenses	$          49,000
	Net operating income	$          25,664
3]		Total	Per Unit
	Sales [36000*97% = 34920]	$      3,24,756	$               9.30
	Variable expenses	$      1,74,600	$               5.00
	Contribution margin	$      1,50,156	$               4.30
	Fixed expenses	$          57,000
	Net operating income	$          93,156
4]		Total	Per Unit
	Sales [36000*94% = 33840]	$      3,24,864	$               9.60
	Variable expenses	$      1,79,352	$               5.30
	Contribution margin	$      1,45,512	$               4.30
	Fixed expenses	$          49,000
	Net operating income	$          96,512
	ANSWERS:
1	Net operating income	$          79,520
2	Net operating income	$          25,664
3	Net operating income	$          93,156
4	Net operating income	$          96,512