Question

Saved Homework Check my work mode: This shows what is correct or incorrect for the work you have comple Miller Company's contribution format income statement for the most recent month is shown below Per Unit 5 6.00 Total $ 234,000 Sales (39,000 undts) Variable egenses 117,000 3,00 Contribution margin 117,000 S 3.00 Flxed expenses Net oper ating income 44,000 73,000 Required: (Consider each case independently) 1 What is the revised net operating income if unit sales increase by 19%? 2 What is the revised net operating income if the selling price decreases by 5130 per unit and the number of units sold increases by 21%? 3 What is the revised net operating income if the selling price increases by $130 per unit, fixed expenses increase by $8,000, and the number of units sold decreases by 7%? 4 What is the revised net operating income if the selling price per unit increases by 20 %, variable expenses increase by 10 cents per unit, and the number of units sold decreases by 5%? Answer is not complete. Net operating income Net operating income Net operting income 117 460 2 3 Net operating 4 income re 1 of 4 Next search

Answer 1

1	If unit sales increases by 19%
	Revised sales units =39,000*1.19 =46,410 units
	Income statement
	Sales(46,410 units*$6)	$278,460
	Less:Variable expenses(46,410*3)	139,230
	Contribution margin	139,230
	Less:Fixed expenses	44,000
	Net operating income	$95,230
2	If Selling price decreases by $1.30 per unit and units sold increases by 21%
	Revised sales units =39,000*1.21 =47,190 units
	Selling price per unit =$6.00-1.30 =$4.70 per unit
	Income statement
	Sales(47,190 units*$4.70)	$221,793
	Less:Variable expenses(47,190*3)	141,570
	Contribution margin	80,223
	Less:Fixed expenses	44,000
	Net operating income	$36,223
3	If Selling price increases by $1.30 per unit & fixed expense increases by $8,000 and units sold decreases by 7%
	Revised sales units =39,000*0.93 =36,270 units
	Selling price per unit =$6.00+1.30 =$7.30 per unit
	Fixed expenses =$44,000 + 8,000=$52,000
	Income statement
	Sales(36,270 units*$7.30)	$264,771
	Less:Variable expenses(36,270 units*3)	108,810
	Contribution margin	155,961
	Less:Fixed expenses	52,000
	Net operating income	$103,961
4	Revised sales units =39,000*0.95 =37,050 units
	Selling price per unit =$6.00*1.20 =$7.20 per unit
	Variable expenses per unit =$3.00*1.10 =$3.30 per unit
	Income statement
	Sales(37,050 units*$7.20)	$266,760
	Less:Variable expenses(37,050 units*3.30)	122,265
	Contribution margin	144,495
	Less:Fixed expenses	44,000
	Net operating income	$100,495