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A manufacturer's contribution margin income statement for the year follows. Prepare contribution margin income statements for each of the three separate cases below. Contribution Margin Income Statement Sales (10,000 units x $10 per unit) Variable costs (10,000 units x $6 per unit) Contribution margin (10,000 units x $4 per unit) Fixed costs Income Required: $ 100,000 60,000 40,000 30,000 $ 10,000 1. The 10,000 units sold and produced increases to 10,400 units and fixed costs increase by $5,000. 2. Unit selling price decreases by 5% and units sold and produced increase by 8%. Hint: A unit increase has both a sales and costs impact. 3. Fixed costs increase by $20,000, variable costs per unit decrease by $2, and units sold and produced increase by 500.

A manufacturer's contribution margin income statement for the year follows. Prepare contribution margin income statements for each of the three separate cases below. Contribution Margin Income Statement Sales (10,000 units x $10 per unit) Variable costs (10,000 units x $6 per unit) Contribution margin (10,000 units x $4 per unit) Fixed costs Income Required: $ 100,000 60,000 40,000 30,000 $ 10,000 1. The 10,000 units sold and produced increases to 10,400 units and fixed costs increase by $5,000. 2. Unit selling price decreases by 5% and units sold and produced increase by 8%. Hint: A unit increase has both a sales and costs impact. 3. Fixed costs increase by $20,000, variable costs per unit decrease by $2, and units sold and produced increase by 500.

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management analysis
Section: Chapter Questions
Problem 4BE
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3 A manufacturer's contribution margin income statement for the year follows. Prepare contribution margin income statements for each of the three separate cases below. Contribution Margin Income Statement Sales (10,000 units x $10 per unit) Variable costs (10,000 units x $6 per unit) Contribution margin (10,000 units x $4 per unit) Fixed costs Income $ 100,000 60,000 40,000 30,000 $ 10,000 Required: 1. The 10,000 units sold and produced increases to 10,400 units and fixed costs increase by $5,000. 2. Unit selling price decreases by 5% and units sold and produced increase by 8%. Hint: A unit increase has both a sales and costs impact. 3. Fixed costs increase by $20,000, variable costs per unit decrease by $2, and units sold and produced increase by 500.
Transcribed Image Text:3 A manufacturer's contribution margin income statement for the year follows. Prepare contribution margin income statements for each of the three separate cases below. Contribution Margin Income Statement Sales (10,000 units x $10 per unit) Variable costs (10,000 units x $6 per unit) Contribution margin (10,000 units x $4 per unit) Fixed costs Income $ 100,000 60,000 40,000 30,000 $ 10,000 Required: 1. The 10,000 units sold and produced increases to 10,400 units and fixed costs increase by $5,000. 2. Unit selling price decreases by 5% and units sold and produced increase by 8%. Hint: A unit increase has both a sales and costs impact. 3. Fixed costs increase by $20,000, variable costs per unit decrease by $2, and units sold and produced increase by 500.
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