Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per...

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Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per...

Whirly Corporation’s contribution format income statement for the most recent month is shown below:

	Total		Per Unit
Sales (8,300 units)	$	282,200	$	34.00
Variable expenses		157,700		19.00
Contribution margin		124,500	$	15.00
Fixed expenses		55,000
Net operating income	$	69,500

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 7,300 units?

business accounting

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Answer 1

Answer #1

	Case 1	Case 2	Case 3
Units sold	(8300+50)=8350	(8300-50)=8250	7300
Sales	(8350*34)=283900	(8250*34)=280500	(7300*34)=248200
Variable expenses	(8350*19)=158650	(8250*19)=156750	(7300*19)=138700
Contribution margin	125250	123750	109500
Fixed expenses	55,000	55,000	55,000
Revised net operating income	$70250	$68750	$54500

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Answer 2

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