Miller Company’s contribution format income statement for the most recent month
ID: 2520205 • Letter: M
Question
Miller Company’s contribution format income statement for the most recent month is shown below:
Required:
(Consider each case independently):
1. What is the revised net operating income if unit sales increase by 13%?
2. What is the revised net operating income if the selling price decreases by $1.30 per unit and the number of units sold increases by 23%?
3. What is the revised net operating income if the selling price increases by $1.30 per unit, fixed expenses increase by $7,000, and the number of units sold decreases by 7%?
4. What is the revised net operating income if the selling price per unit increases by 10%, variable expenses increase by 30 cents per unit, and the number of units sold decreases by 12%?
Total Per Unit Sales (37,000 units) $ 185,000 $ 5.00 Variable expenses 74,000 2.00 Contribution margin 111,000 $ 3.00 Fixed expenses 40,000 Net operating income $ 71,000Explanation / Answer
1. What is the revised net operating income if unit sales increase by 13%?
2. What is the revised net operating income if the selling price decreases by $1.30 per unit and the number of units sold increases by 23%?
3. What is the revised net operating income if the selling price increases by $1.30 per unit, fixed expenses increase by $7,000, and the number of units sold decreases by 7%?
4. What is the revised net operating income if the selling price per unit increases by 10%, variable expenses increase by 30 cents per unit, and the number of units sold decreases by 12%?
Total Per unit Sales 209050 5 Variable cost 83620 2 Contribution margin 125430 3 Fixed cost 40000 Net operating income 85430