Question

Check my work 4 Miller Company's contribution format income statement for the most recent month is shown below Per Unit Total $ 324,000 Sales (36,000 units) Variable expenses 9.00 12.5 216,000 6.00 points Contribution margin 3.00 108,000 Skipped Fixed expenses 45,000 63,000 Net operating income Print Required: (Consider each case independently) 1. What is the revised net operating income if unit sales increase by 18%? 2. What is the revised net operating income if the selling price decreases by $1.10 per unit and the number of units sold increases by 24%? 3. What is the revised net operating income if the selling price increases by $1.10 per unit, fixed expenses increase by $8,000, and the number of units sold decreases by 2%? 4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 20 cents per unit, and the number of units sold decreases by 14%?

Answer 1

Original
	Sales	$ 3,24,000.00
	(36000 Units*$9)
	Variable Expenses	$ 2,16,000.00
	(36000 Units*$6)
	Contribution Margin	$ 1,08,000.00
	(36000 Units*$3)
	Fixed Expenses	$     45,000.00
	Net Opreating Income	$     63,000.00
1)	Net Operating Income If Units Sales Increase by 18%
	Unit sales =36000+18% =42480 units
	Sales	$ 3,82,320.00
	(42480 Units*$9)
	Variable Expenses	$ 2,54,880.00
	(42480 Units*$6)
	Contribution Margin	$ 1,27,440.00
	(42480 Units*$3)
	Fixed Expenses	$     45,000.00
	Net Opreating Income	$     82,440.00
2)
	Number Of Unit Sold = 36000+24% =44640 units
	Sales	$ 3,52,656.00
	(44640 Units*$7.9)
	Variable Expenses	$ 2,67,840.00
	(44640 Units*$6)
	Contribution Margin	$     84,816.00
	(44640 Units*$3)
	Fixed Expenses	$     45,000.00
	Net Opreating Income	$     39,816.00
3)	Sales Price = $9+1.1 =$10.10
	Ssales Unit =36000 units -2%=35280
	Fixed Cost =45000+8000 =53000
	Sales	$ 3,56,328.00
	(35280 Units*$10.10)
	Variable Expenses	$ 2,11,680.00
	(35280 Units*$6)
	Contribution Margin	$ 1,44,648.00
	(35280 Units*$3)
	Fixed Expenses	$     53,000.00
	Net Opreating Income	$     91,648.00
4)	Selling price per unit = 9+20% =10.8
	Variable Cost per unit = 6+20%=7.2
	Sales Units = 36000-14% =30960 Units
	Sales	$ 3,34,368.00
	(30960 Units*$10.8)
	Variable Expenses	$ 2,22,912.00
	(30960 Units*$7.2)
	Contribution Margin	$ 1,11,456.00
	(30960 Units*$3)
	Fixed Expenses	$     45,000.00
	Net Opreating Income	$     66,456.00