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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question

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.
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON

Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education

Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education