Question

Miller Company's contribution format income statement for the most recent month is shown below: 1.5 points Sales (34,000 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 306,000 204,000 102,000 44,000 $ 58,000 Per Unit $ 9.00 6.00 $ 3.00 Skipped eBook Required: Hint

Answer 1

Ans. 1	New units sold (34,000 * 1.18)   =   40,120 units
		Total	Per unit
	Sales (40,120 *p)	$361,080	$9.00
	Variable expenses (40,120 * v)	-$240,720	-$6.00
	Contribution margin	$120,360	$3.00
	Fixed expenses	-$44,000
	Revised net operating income	$76,360
	P   =   price per unit
	V = variable cost per unit
Ans. 2	New selling price ($9 - $1.10) = $7.90 per unit
	New units sold (34,000 * 1.16)   =   39,440 units
		Total	Per unit
	Sales (39,440 *p)	$311,576	$7.90
	Variable expenses (39,440 * v)	-$236,640	-$6.00
	Contribution margin	$74,936	$1.90
	Fixed expenses	-$44,000
	Revised net operating income	$30,936
Ans. 3	New selling price ($9 + $1.10) = $10.10 per unit
	Sales volume (34,000 * 0.93)   =   31,620 units
	New fixed expenses ($44,000 + $6,000) = $50,000
		Total	Per unit
	Sales (31,620 *p)	$319,362	$10.10
	Variable expenses (31,620 * v)	-$189,720	-$6.00
	Contribution margin	$129,642	$4.10
	Fixed expenses	-$50,000
	Revised net operating income	$79,642
Ans. 4	New selling price ($9 * 1.20) = $10.8 per unit
	Sales volume (34,000 * 0.89)   =   30,260 units
	New variable expenses ($6 + $0.30) = $6.30 per unit
		Total	Per unit
	Sales (30,260 *p)	$326,808	$10.80
	Variable expenses (30,260 * v)	-$190,638	-$6.30
	Contribution margin	$136,170	$4.50
	Fixed expenses	-$44,000
	Revised net operating income	$92,170
	*Fixed expenses remain constant (if additional information is not given).