Miller Company’s most recent contribution format income statement is shown below: Total Per Unit Sales (39,000 units) $273,000 $7.00 Variable expenses 156,000 4.00 Contribution margin 117,000 $3.00 Fixed expenses 49,000 Net operating income $ 68,000 Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently): (Do not round intermediate calculations. Round your "Per unit" answers to 2 decimal places.)
1. The number of units sold increases by 15%.
2. The selling price decreases by $1.20 per unit, and the number of units sold increases by 23%.
3. The selling price increases by $1.20 per unit, fixed expenses increase by $5,000, and the number of units sold decreases by 5%.
4. The selling price increases by 20%, variable expenses increase by 30 cents per unit, and the number of units sold decreases by 11%.
1. |
Sales (39,000 units × 1.15 = 44,850 units)..... |
Total $313,950 |
Per Unit $ 7.00 |
Variable expenses ......................................... |
179,400 |
4.00 |
|
Contribution margin....................................... |
134,550 |
$ 3.00 |
|
Fixed expenses ............................................. |
49,000 |
||
Net operating income .................................... |
$ 85,550 |
||
2. |
Sales (39,000 units × 1.23 = 47,970 units)..... |
$278,226 |
$ 5.80 |
Variable expenses ......................................... |
191,880 |
4.00 |
|
Contribution margin....................................... |
86,346 |
$ 1.80 |
|
Fixed expenses ............................................. |
49,000 |
||
Net operating income .................................... |
$ 37,346 |
||
3. |
Sales (39,000 units × 0.95 = 37,050 units)..... |
$303,810 |
$ 8.20 |
Variable expenses ......................................... |
148,200 |
4.00 |
|
Contribution margin....................................... |
155,610 |
$ 4.20 |
|
Fixed expenses ............................................. |
54,000 |
||
Net operating income .................................... |
$101,610 |
||
4. |
Sales (39,000 units × 0.89 = 34,710 units)..... |
$291,564 |
$ 8.40 |
Variable expenses ......................................... |
180,492 |
5.20 |
|
Contribution margin....................................... |
111,072 |
$ 3.20 |
|
Fixed expenses ............................................. |
49,000 |
||
Net operating income .................................... |
$ 62,072 |
Miller Company’s most recent contribution format income statement is shown below: Total Per Unit Sales (39,000...
Miller Company’s most recent contribution format income statement is shown below: Total Per Unit Sales (39,000 units) $273,000 $7.00 Variable expenses 156,000 4.00 Contribution margin 117,000 $3.00 Fixed expenses 46,000 Net operating income $ 71,000 Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently): (Do not round intermediate calculations. Round your "Per unit" answers to 2 decimal places.) 1. The number of units sold increases by 15%. 2. The selling...
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Miller Company's most recent contribution format income statement is shown below: Sales (39,000 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $234,000 117,000 117,000 41,000 $ 76,000 Per Unit $6.00 3.00 $3.00 Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently): (Do not round intermediate calculations. Round your "Per unit" answers to 2 decimal places.) 1. The number of units sold increases by 17%. Miller Company Contribution Income...
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Miller Company’s most recent contribution format income statement is shown below: Total Per Unit Sales (39,000 units) $273,000 $7.00 Variable expenses 156,000 4.00 Contribution margin 117,000 $3.00 Fixed expenses 46,000 Net operating income $ 71,000 3. At present, the company is selling 10,000 stoves per month. The sales manager is convinced that a 10% reduction in the selling price would result in a 25% increase in monthly sales of stoves. Prepare two contribution format income statements, one under present operating...
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