Question

Whirly Corporation's contribution format income statement for the most recent month is shown below: Total $ 308,000 167,200 Sales (8,800 units) Variable expenses Contribution margin Fixed expenses Net operating income Per Unit $ 35.00 19.00 $ 16.00 140,800 55,900 $ 84,900 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 7,800 units? 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income

Answer 1

Answer:

Requirement 1

Whirly corporation
Contribution income statement
	Total	Per unit
Sales (8890 units)	$ 311150	$          35
Variable expenses	$ 168910	$          19
contribution margin	$ 142240	$          16
Fixed expenses	$ 55900
Net operating income	$      86340

Requirement 2

Whirly corporation
Contribution income statement
	Total	Per unit
Sales (8710 units)	$ 304850	$          35
Variable expenses	$ 165490	$          19
contribution margin	$ 139360	$          16
Fixed expenses	$ 55900
Net operating income	$      83460

Requirement 3

Whirly corporation
Contribution income statement
	Total	Per unit
Sales (7800 units)	$ 273000	$          35
Variable expenses	$ 148200	$          19
contribution margin	$ 124800	$          16
Fixed expenses	$ 55900
Net operating income	$ 68900