Prepare a new income statement if the selling price increases by 5%, variable ex
ID: 2418773 • Letter: P
Question
Prepare a new income statement if the selling price increases by 5%, variable expenses increase by 20 cents per unit, and the sales volume decreases by 10%. (Round "Per Unit" answers to 2 decimal places.)
Total
Per Unit
Sales (25,000 units)
$
250000
$
10
Less: Variable expenses
50,000
2
Contribution margin
200,000
$
8
Less: Fixed expenses
72,000
Net income
$
128,000
Total
Per Unit
Sales (25,000 units)
$
250000
$
10
Less: Variable expenses
50,000
2
Contribution margin
200,000
$
8
Less: Fixed expenses
72,000
Net income
$
128,000
Explanation / Answer
Sales 22500*10.5 236250 Less:Variable expenses 22500*2.4 54000 Contribution Margin 182250 Less:Fixed expenses 72000 Net Income 110250