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Miller Company's contribution format income statement for the most recent month is shown below: Total $ 259,200 155,520 103,680 $ 3.60 Per Unit $9.00 5.40 60,480 $ 43,200 Sales (28,800 units) Variable expenses Contribution margin Fixed expenses Net operating income Required: (Consider each of the four requirements independently): 1. Assume the sales volume increases by 4,896 units: a. What is the revised net operating income? b. What is the percent increase in unit sales? c. Using the most recent month's degree of operating leverage, what is the percent increase in net operating income? 2. What is the revised net operating income if the selling price decreases by $1.30 per unit and the number of units sold increases by 22%? 3. What is the revised net operating income if the selling price increases by $1.30 per unit, fixed expenses increase by $8,000, and the number of units sold decreases by 7%?

Miller Company's contribution format income statement for the most recent month is shown below: Total $ 259,200 155,520 103,680 $ 3.60 Per Unit $9.00 5.40 60,480 $ 43,200 Sales (28,800 units) Variable expenses Contribution margin Fixed expenses Net operating income Required: (Consider each of the four requirements independently): 1. Assume the sales volume increases by 4,896 units: a. What is the revised net operating income? b. What is the percent increase in unit sales? c. Using the most recent month's degree of operating leverage, what is the percent increase in net operating income? 2. What is the revised net operating income if the selling price decreases by $1.30 per unit and the number of units sold increases by 22%? 3. What is the revised net operating income if the selling price increases by $1.30 per unit, fixed expenses increase by $8,000, and the number of units sold decreases by 7%?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Miller Company's contribution format income statement for the most recent month is shown below: Per Unit $9.00 5.40 $ 3.60 Sales (28,800 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 259,200 155,520 103,680 60,480 $ 43,200 Required: (Consider each of the four requirements independently): 1. Assume the sales volume increases by 4,896 units: a. What is the revised net operating income? b. What is the percent increase in unit sales? c. Using the most recent month's degree of operating leverage, what is the percent increase in net operating income? 2. What is the revised net operating income if the selling price decreases by $1.30 per unit and the number of units sold increases by 22%? 3. What is the revised net operating income if the selling price increases by $1.30 per unit, fixed expenses increase by $8,000, and the number of units sold decreases by 7%? 4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 30 cents per unit, and the number of units sold decreases by 11%? 1a. Net operating income 1b. Percent increase in unit sales 1c. Percent increase in net operating income 2. Net operating income (loss) 3. Net operating income 4. Net operating income % %
Transcribed Image Text:Miller Company's contribution format income statement for the most recent month is shown below: Per Unit $9.00 5.40 $ 3.60 Sales (28,800 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 259,200 155,520 103,680 60,480 $ 43,200 Required: (Consider each of the four requirements independently): 1. Assume the sales volume increases by 4,896 units: a. What is the revised net operating income? b. What is the percent increase in unit sales? c. Using the most recent month's degree of operating leverage, what is the percent increase in net operating income? 2. What is the revised net operating income if the selling price decreases by $1.30 per unit and the number of units sold increases by 22%? 3. What is the revised net operating income if the selling price increases by $1.30 per unit, fixed expenses increase by $8,000, and the number of units sold decreases by 7%? 4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 30 cents per unit, and the number of units sold decreases by 11%? 1a. Net operating income 1b. Percent increase in unit sales 1c. Percent increase in net operating income 2. Net operating income (loss) 3. Net operating income 4. Net operating income % %
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