Question

Whirly Corporation's most recent income statement is shown below: Sales (8,600 units) Variable expenses Total $ 258,000 172,000 Per Unit $30.00 20.00 $10.00 Contribution margin Fixed expenses 86,000 54,100 Net operating income $ 31,900 Required: Prepare a new contribution format income statement under each of the following conditions (consider each case Independently): 1. The sales volume increases by 100 units. Whirly Corporation Contribution Income Statement Total Per Unit 2. The sales volume decreases by 100 units. Whirly Corporation Contribution Income Statement Total Per Unit 3. The sales volume is 7.600 units. Whirly Corporation Contribution Income Statement Total Per Unit

Answer 1

Requirement: 1 Whirl Cororation Contribution Income statement Total Per Unit Sales (8700 * 30) 261000 30 Less: Variable cost ( 8700 * 20) 174000 201 Contribution Margin 87000 10 Less: Fixed expenses 54100 Revised Net operating income 32900 Requirement: 2 Whirl Cororation Contribution Income statement Total Per Unit Sales (8500 * 30) 255000 Less: Variable cost (8500 * 20) 170000 201 Contribution Margin 85000 101 Less: Fixed expenses 54100 Revised Net operating income 30900

Requirement: 3 Whirl Cororation Contribution Income statement Total Per Unit Sales (7600 *30) 228000 Less: Variable cost (7600 * 20) 1520001 Contribution Margin 76000 Less: Fixed expenses 54100 Revised Net operating income 21900