Miller Company’s most recent contribution format income statement is shown below
ID: 2653198 • Letter: M
Question
Miller Company’s most recent contribution format income statement is shown below:
Total Per Unit
Sales (35,000 units) $280,000 $8.00
Variable expenses 175,000 5.00
Contribution margin 105,000 $3.00
Fixed expenses 41,000
Net operating income $ 64,000
Required:
Prepare a new contribution format income statement under each of the following conditions (consider each case independently): (Do not round intermediate calculations. Round your "Per unit" answers to 2 decimal places.)
1. The number of units sold increases by 13%.
2. The selling price decreases by $1.50 per unit, and the number of units sold increases by 23%.
3. The selling price increases by $1.50 per unit, fixed expenses increase by $8,000, and the number of units sold decreases by 3%.
4. The selling price increases by 20%, variable expenses increase by 10 cents per unit, and the number of units sold decreases by 5%.
Explanation / Answer
1.
2.
3.
4.
Particulars Total Per unit Sales (113% * 35,000 units = 39,550 units) $316,400 $8.00 Variable expenses $197,750 $5.00 Contribution margin $118,650 $3.00 Fixed expenses $41,000 - Net Operating Income $77,650 -