Question

Miller Company’s most recent contribution format income statement is shown below:

	Total	Per Unit
Sales (45,000 units)	$225,000	$5.00
Variable expenses	90,000	2.00
Contribution margin	135,000	$3.00
Fixed expenses	46,000
Net operating income	$ 89,000

Required:

Prepare a new contribution format income statement under each of the following conditions (consider each case independently): (Do not round intermediate calculations. Round your "Per unit" answers to 2 decimal places.)

   

1.	The number of units sold increases by 17%.

	Miller Company Contribution Income Statement Total Per Unit Contribution margin

2.	The selling price decreases by $1.20 per unit, and the number of units sold increases by 22%.
		Miller Company Contribution Income Statement Total Per Unit

3.

The selling price increases by $1.20 per unit, fixed expenses increase by $6,000, and the number of units sold decreases by 4%. Miller Company Contribution Income Statement Total Per Unit 4. The selling price increases by 20%, variable expenses increase by 30 cents per unit, and the number of units sold decreases by 13%. Miller Company Contribution Income Statement Total Per Unit

Answer 1

mber of unit s sold increase Miller Company Contribution Income Statement Particulars Sales(45000 units 1.17) 52650 units, (52650 5A$263,250 S Variable expense (52650 units 2),B Contribution margin(CEA-B) Fixed ex Net operating income. E-C-D Total Per unit 105,300 157,950$ 5.00 2.00 3.00 pense,D 46,000 S 111,950 2 The selling price decreases by $1.20 per unit, and the number of units sold increases by 22%. Miller Company Contribution Income Statement Particulars Sales (54900 *3.8)A Variable expense (54900 units 2),B Contribution margin(CEA-B) Fixed expense,D Net operating income. E-C-D Total Per unit S 208,620 $ 109,800 3.80 2.00 1.80 98,820 $ 46,000 52,820 Selling price per unit 5-1.2 Sales units -45000 1.22 3.8 54900

selling price increase unit, fixed expenses increase by $6,000, and the mber of units sold decr Miller Company Contribution Income Statement Particulars Sales (43200 units *6.2)A Variable expense (43200 units 2),B Contribution margin(CEA-B) Fixed expense,D Net operating income. E-C-D Total Per unit S 267,840 $ 86,400 181,440 $ 2,000 6.20 2.00 4.29 S 129.440 Seling price per unit 5+1.2 Sales units-45000*0.96 Fixed expenses- $46000+$6000 6.2 43200 52000

e selling price increase variable expenses increas cents per unit, and th mber of units sold decr Miller Company Contribution Income Statement Particulars Sales (39150 *6),A Variable expense (39150 units 2.3),B Contribution margin(CEA-B) Fixed expense,D Net operating income. E-C-D Total Per unit $ 234,900 $ 90,045 144,855 S 6.00 2.30 3.70 46,000 98,855 Selling price per unit 51.20 Sales units-45000*0.87 Variables expenses 2+0.30 39150 2.3