Question

Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (7,880 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 249,600 148,200 101,480 55,880 $ 45,600 Per Unit $ 32.ee 19.00 $ 13.00 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 30 units? 2. What would be the revised net operating income per month if the sales volume decreases by 30 units? 3. What would be the revised net operating income per month if the sales volume is 6,800 units? 1. Revised not operating income 2. Revised not operating income 3. Revised not operating income

Answer 1

1
Sales revenue (7830 units)	250560	=7830*32
Less: Variable expenses	148770	=7830*19
Contribution margin	101790
Less: Fixed expenses	55800
Revised net operating income	45990
2
Sales revenue (7770 units)	248640	=7770*32
Less: Variable expenses	147630	=7770*19
Contribution margin	101010
Less: Fixed expenses	55800
Revised net operating income	45210
3
Sales revenue (7830 units)	217600	=6800*32
Less: Variable expenses	129200	=6800*19
Contribution margin	88400
Less: Fixed expenses	55800
Revised net operating income	32600