Question

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

Total Per Unit

Sales (37,000 units) $ 259,000 $ 7.00

Variable expenses 148,000 4.00

Contribution margin 111,000 $ 3.00

Fixed expenses 48,000

Net operating income $ 63,000

Required: (Consider each case independently):

1. What is the revised net operating income if unit sales increase by 14%?

2. What is the revised net operating income if the selling price decreases by $1.10 per unit and the number of units sold increased by 17%?

3. What is the revised net operating income if the selling price increases by $1.10 per unit, fixed expenses increase by $7,000, and the number of units sold decreases by 4%?

4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 10 cents per unit, and the number of units sold decreases by 9%?

Answer 1