Below is the contribution format income statement for a company based on a sales volume of 1,000 units (the relevant range ofproduction is 500 units to 1,500 units):Sales$ 55,00033,00022,00014,960$ 7,040Variable expensesContribution marginFixed expensesNet operating incomeIf the variable cost per unit increases by $1, spending on advertising increases by $1,450, and unit sales increase by 190 units, whatwould be the new net operating income?(All answers are whole numbers - unless specified otherwise. You should NOT include the $ sign or a comma. E.g., you should type1000 for one thousand. Negative numbers should be added with a minus sign, e.g., -1000 for a decrease or loss of one thousand.)Net operating income after the changes = $%3D

Solution: Current CM per unit = $22,000 / 1000 = $22 per unit New CM per unit = $22 - $1 = $21 per…

Answered: Below is the contribution format income…

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 16E

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Help Save & Exit Submit Below is the contribution format income statement for a company based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales Variable expenses Contribution margin $ 55,000 33,000 22,000 14,960 $ 7,040 Fixed expenses Net operating income If the variable cost per unit increases by $1, spending on advertising increases by $1,450, and unit sales increase by 190 units, what would be the new net operating income? (All answers are whole numbers 1000 for one thousand. Negative numbers should be added with a minus sign, e.g., -1000 for a decrease or loss of one thousand.) unless specified otherwise. You should NOT include the $ sign or a comma. E.g., you should type Net operating income after the changes %24
A company has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (8,000 units) Variable expenses Contribution margin Fixed expenses Net operating income $320,000 192,000 128,000 110,400 $ 17,600 The margin of safety in dollars is closest to:
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