Question

Miller Company's most recent income statement follows: Sales (16,000 units) . Less: Variable expenses 20 $320,000 160.000 Contribution margin 160,000 $10 Less Fixed expenses 63,000 Net income $ 97 000 Required: 1. Prepare a new income statement if the sales volume increases by 30, $, and the selling price decreases by $3.00. (Round "Per Unit" answers to 2 decimal places.) Total Per llnit Sales

Answer 1

rate positively ..

	Given that -
		Total	Per unit
	Sales   (16000 unit)	320000	20
	Less: Variable expenses	160000	10
	Contribution margin	160000	10
	Less: Fixed cost	63000
	Net income	97000
Ans 1	Revised sales volume = 16000*130% =
		20800
	Given that -
		Total	Per unit
	Sales   (20800 unit)	353600	17.00
	Less: Variable expenses	208000	10.00
	Contribution margin	145600	7.00
	Less: Fixed cost	63000
	Net income	82600
Ans 2	Revised sales volume = 16000*110% =
		17600
	Given that -
		Total	Per unit
	Sales   (17600 unit)	308000	17.50
	Less: Variable expenses	176000	10.00
	Contribution margin	132000	7.50
	Less: Fixed cost	63000
	Net income	69000
Ans 3	Revised sales volume = 16000*95% =
		15200
	Given that -
		Total	Per unit
	Sales   (15200 unit)	319200	21.00
	Less: Variable expenses	152000	10.00
	Contribution margin	167200	11.00
	Less: Fixed cost	70000
	Net income	97200
Ans 4	Revised sales volume = 16000*75% =
		12000
	Given that -
		Total	Per unit
	Sales   (12000 unit)	252000	21.00
	Less: Variable expenses	121200	10.10
	Contribution margin	130800	10.90
	Less: Fixed cost	63000
	Net income	67800