Question

Whirly Corporation’s most recent income statement is shown below:

	Total		Per Unit
Sales (8,700 units)	$	269,700	$	31.00
Variable expenses		165,300		19.00
Contribution margin		104,400	$	12.00
Fixed expenses		54,300
Net operating income	$	50,100

Required:

Prepare a new contribution format income statement under each of the following conditions (consider each case independently):

1.	The sales volume increases by 90 units.

     

2.	The sales volume decreases by 90 units.

     

3.	The sales volume is 7,700 units.

     

Answer 1

Sales Income statement DIf Sales volume 2) If Sales volume 3) If sales volume in increase by gounits decrease by 90 units 7,700 units $272490 $266,910 $ 238,700 [8790 x $31] [8610 x $31] (+400 $31] (167010) (163590) (146300) [8790x $19] C 8610 x $19) [7700 x $19) les: variable cost Contribution margin 1054-80 103,320 924.00 (54,300) (54,300) (54,300) Lessi fired cost Net operating income $ 51,180 $49020 $ 38100

Answer to the above question is shown.