Using a Contribution Format Income Statement
Porter Company’s, most recent contribution format income statement is shown below:
| Total | Per Unit |
Sales (30,000 units | $150,000 | $5 |
Variable expenses | 90,000 | 3 |
Contribution margin | 60,000 | $2 |
Fixed expenses | 50,000 |
|
Net operating income | $ 10,000 |
|
Required
Prepare a new contribution format income statement under each of the following conditions (consider each case independently):
1. The number of units sold increases by 15%.
2. The selling price decreases by 50 cents per unit, and the number of units sold increases by 20%.
3. The selling price increases by 50 cents per unit, fixed expenses increase by $10,000, and the number of units sold decreases by 5%
4. Variable expenses increase by 20 cents per unit, the selling price increases by 12%, and the number of units sold decreases by 10%
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