Question

Miller Company's most recent contribution format income statement is shown below: Total $258,000 129.000 129,000 47,000 $ 82,000 Per Unit $6.00 3.00 $3.00 Sales (43,000 units) Variable expenses Contribution margin Fixed expenses Net operating income 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 16%. Miller Company Contribution Income Statement Total Per Unit

Answer 1

1		Total	Per Unit
	Sales (49,880 units)	$299,280	$6.00
	Variable expenses	$149,640	$3.00
	Contribution margin	$149,640	$3.00
	Fixed expenses	$47,000
	Net operating income	$102,640
	Units = 43,000 x 1.16 = 49,880
2		Total	Per Unit
	Sales (52,030 units)	$254,947	$4.90
	Variable expenses	$156,090	$3.00
	Contribution margin	$98,857	$1.90
	Fixed expenses	$47,000
	Net operating income	$51,857
	Units = 43,000 x 1.21 = 52,030
3		Total	Per Unit
	Sales (41,280 units)	$293,088	$7.10
	Variable expenses	$123,840	$3.00
	Contribution margin	$169,248	$4.10
	Fixed expenses	$57,000
	Net operating income	$112,248
	Units = 43,000 x 0.96 = 41,280
4		Total	Per Unit
	Sales (38,270 units)	$275,544	$7.20
	Variable expenses	$137,772	$3.60
	Contribution margin	$137,772	$3.60
	Fixed expenses	$47,000
	Net operating income	$90,772
	Units = 43,000 x 0.89 = 38,270