Question

Whirly Corporation’s contribution format income statement for the most recent month is shown below:

	Total			Per Unit
Sales (8,500 units)	$	297,500		$	35.00
Variable expenses		161,500			19.00
Contribution margin		136,000		$	16.00
Fixed expenses		54,300
Net operating income	$	81,700

Required:

(Consider each case independently):

1. What would be the revised net operating income per month if the sales volume increases by 90 units?

2. What would be the revised net operating income per month if the sales volume decreases by 90 units?

3. What would be the revised net operating income per month if the sales volume is 7,500 units?

1. Revised net operating income.

2. Revised net operating income.

3. Revised net operating income.

Answer 1

. to when sales volume increases by go units then variables expenses is also increases. by go units because it increases with units increased. Sales 8590 ² $35 = 3,00,650 variable 8590 * $19 -1,63,210 cinen, Live 00 Sales 3,00, 65 y variable Expense uft, 63,,210) contribution 1, 37,440 E 54,300 Net operating Income = 83,140

decreases as - 7,500 * 35 $ =2,62,500 2- When sales volume decreases by go units, then variable expenses will also oth unite produced / sold is less than earlier, a salu 8410 * 35.$ 52,94,356 variable Expe= 8410 * 19 $ = 1,59,79€ Cinen, Salis = 2194,350 - variable Expenses =(1,59,790) contribution. = 1,39,560 (-) Fixed Expenses (54,300) operating Income = 3- when sales volume is 7,500 units then variable Expenses will also calculate on 7,500 units of Sales variable Expenses : 7500 * ig=1,4 2,500 Net 080, 266 در این دو نفر از

= criven, sales 2,62,500 variable Expenses=22,42,500) contribution 1,20,000 Fixed Expenses (54,300) uut operating Income = 65,00 1-83, 140- Revised Net operating Income 2-80,260 Revised Net operating Income 3-65, 700-Revised Net Operating Income