Question

Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (8,700 units) $ 287,100 $ 33.00 Variable expenses 165,300 19.00 Contribution margin 121,800 $ 14.00 Fixed expenses 54,300 Net operating income $ 67,500 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 90 units? 2. What would be the revised net operating income per month if the sales volume decreases by 90 units? 3. What would be the revised net operating income per month if the sales volume is 7,700 units?

Answer 1

		Per unit	Total
	Unit Sales	8700 units
	Sales	$33	$2,87,100
	Variable expenses	$19	$1,65,300
	Contribution margin	$14	$1,21,800
	Fixed expenses		$54,300
	Net operating income		$67,500
1	Unit Sales	8790 units
	Sales	$33	$2,90,070
	Variable expenses	$19	$1,67,010
	Contribution margin	$14	$1,23,060
	Fixed expenses		$54,300
	Net operating income		$68,760
2	Unit Sales	8610 units
	Sales	$33	$2,84,130
	Variable expenses	$19	$1,63,590
	Contribution margin	$14	$1,20,540
	Fixed expenses		$54,300
	Net operating income		$66,240
3	Unit Sales	7700 units
	Sales	$33	$2,54,100
	Variable expenses	$19	$1,46,300
	Contribution margin	$14	$1,07,800
	Fixed expenses		$54,300
	Net operating income		$53,500