Check my work Check My Work button is now enabledItem 8 Item 8 10 points Miller
ID: 2524448 • Letter: C
Question
Check my work Check My Work button is now enabledItem 8 Item 8 10 points Miller Company’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (32,000 units) $ 288,000 $ 9.00 Variable expenses 192,000 6.00 Contribution margin 96,000 $ 3.00 Fixed expenses 43,000 Net operating income $ 53,000 Required: (Consider each case independently): 1. What is the revised net operating income if unit sales increase by 15%? 2. What is the revised net operating income if the selling price decreases by $1.40 per unit and the number of units sold increases by 22%? 3. What is the revised net operating income if the selling price increases by $1.40 per unit, fixed expenses increase by $9,000, 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 20%, variable expenses increase by 30 cents per unit, and the number of units sold decreases by 15%?
Explanation / Answer
1) Unit sales increase by 15%
2) Selling price decrease by $1.4 and units increases by 22%
3) Selling price increases by $1.4, Fixed expenses increase by 9000 and units sold decrease by 7%
4) Selling price per unit increases by 20%, variable expenses increase by 30 cents, units sold decrease by 15%
Selling units 36800 Sales revenue $3,31,200 Variable expenses $2,20,800 Contribution margin $1,10,400 Fixed expenses $43,000 Net operating income $67,400