Question

Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (8,100 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 251,100 162,000 89,100 54,600 $ 34,500 Per Unit $ 31.00 20.00 $ 11.00 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 50 units? 2. What would be the revised net operating income per month if the sales volume decreases by 50 units? 3. What would be the revised net operating income per month if the sales volume is 7,100 units? 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income

Answer 1

	Case 1	Case 2	Case 3
Units sold	(8100+50)=8150	(8100-50)=8050	7100
Sales	(8150*31)=252650	(8050*31)=249,550	(7100*31)=220100
Variable expenses	(8150*20)=163,000	(8050*20)=161,000	(7100*20)=142,000
Contribution margin	89650	88550	78100
Fixed expenses	54600	54600	54600
Revised net operating income	35050	33950	23500