Question

Whirly corporation s contribution format
income statement for the most recent month is shown below:
                                             Total.            Per unit
Sales ( 7200 units)        223200. $         31.00 $
Variable expenses.        129600.           18.00
Contribution margin.      93600.             13.00
Fixed expenses.               55100
Net operating income.     38500
Required: ( consider each case independently)
1. What would be the revised net operating income per month if the sales volume increases by 70 units?
2. What would be the revised net operating income per month if the sales volume decreases by 70 units?
3. What would be the revised net operating income per month if the sales volume is 6200 units?
1 . Revised net operating income.
2 . Revised net operating income.
3 . Revised net operating income.

Answer 1

1	Sales volume=7200+70=7270 units
	Revised net operating income:
				Total	Per unit
	Sales ( 7270 units)		(7270*31)	225370	31
	Variable expenses.		(7270*18)	130860	18
	Contribution margin			94510	13
	Fixed expenses			55100
	Net operating income			39410
2	Sales volume=7200-70=7130 units
	Revised net operating income:
				Total	Per unit
	Sales ( 7130 units)		(7130*31)	221030	31
	Variable expenses.		(7130*18)	128340	18
	Contribution margin			92690	13
	Fixed expenses			55100
	Net operating income			37590
3	Sales volume=6200 units
	Revised net operating income:
				Total	Per unit
	Sales ( 6200 units)		(6200*31)	192200	31
	Variable expenses.		(6200*18)	111600	18
	Contribution margin			80600	13
	Fixed expenses			55100
	Net operating income			25500