Question

Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (8,600 units) Variable expenses Contribution margin Fixed expenses Net operating income points Total $ 283,800 163, 400 120,400 55,300 $ 65,100 Per Unit $ 33.00 19.00 $ 14.00 ( 8 00:53:16 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 60 units? 2. What would be the revised net operating income per month if the sales volume decreases by 60 units? 3. What would be the revised net operating income per month if the sales volume is 7,600 units? Answer is complete but not entirely correct. $ Revised net operating income Revised net operating income Revised net operating income $ $ 65,540 X 63,860 50,700

Answer 1

--Requirements

1	Revised Net Operating Income	$65,940
2	Revised Net Operating Income	$64,260
3	Revised Net Operating Income	$51,100

--Calculations for above:

	Requirement	1	2	3
A	Units	8,660	8,540	7,600
B = A x $ 33	Sales	$285,780	$281,820	$250,800
C = A x $ 19	Variable expenses	$164,540	$162,260	$144,400
D = B - C	Contribution margin	$121,240	$119,560	$106,400
E	Fixed expenses	$55,300	$55,300	$55,300
F = D - E	Revised Net Operating Income	$65,940	$64,260	$51,100