EXERCISE 6–11 Using a Contribution Format Income Statement [ LO1 , LO4 ] Miller Company’s most recent contribution format income statement is shown below: Total Per Unit Sales (20,000 units) . . . . . . . . . . . $300,000 $15.00 Variable expenses . . . . . . . . . . . . 180,000 9.00 Contribution margin . . . . . . . . . . . 120,000 $ 6.00 Fixed expenses. . . . . . . . . . . . . . . 70,000 Net operating income . . . . . . . . . . $ 50,000 Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently): 1. The number of units sold increases by 15%. 2. The selling price decreases by $1.50 per unit, and the number of units sold increases by 25%. 3. The selling price increases by $1.50 per unit, fi xed expenses increase by $20,000, and the number of units sold decreases by 5%. 4. The selling price increases by 12%, variable expenses increase by 60 cents per unit, and the number of units sold decreases by 10%
EXERCISE 6–11 Using a Contribution Format Income Statement [ LO1 , LO4 ]
Miller Company’s most recent contribution format income statement is shown below:
Total
Per Unit
Sales (20,000 units) . . . . . . . . . . . $300,000 $15.00
Variable expenses . . . . . . . . . . . . 180,000 9.00
Contribution margin . . . . . . . . . . . 120,000 $ 6.00
Fixed expenses. . . . . . . . . . . . . . . 70,000
Net operating income . . . . . . . . . . $ 50,000
Required:
Prepare a new contribution format income statement under each of the following conditions (consider each case independently):
1. The number of units sold increases by 15%.
2. The selling price decreases by $1.50 per unit, and the number of units sold increases by
25%.
3. The selling price increases by $1.50 per unit, fi xed expenses increase by $20,000, and the
number of units sold decreases by 5%.
4. The selling price increases by 12%, variable expenses increase by 60 cents per unit, and the
number of units sold decreases by 10%
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