Miller Company’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (36,000 units) $ 180,000 $ 5.00 Variable expenses 72,000 2.00 Contribution margin 108,000 $ 3.00 Fixed expenses 43,000 Net operating income $ 65,000 Required: (Consider each case independently): 1. What is the revised net operating income if unit sales increase by 17%? 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 24%? 3. What is the revised net operating income if the selling price increases by $1.30 per unit, fixed expenses increase by $6,000, and the number of units sold decreases by 3%? 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 13%?
Miller Company’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (36,000 units) $ 180,000 $ 5.00 Variable expenses 72,000 2.00 Contribution margin 108,000 $ 3.00 Fixed expenses 43,000 Net operating income $ 65,000 Required: (Consider each case independently): 1. What is the revised net operating income if unit sales increase by 17%? 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 24%? 3. What is the revised net operating income if the selling price increases by $1.30 per unit, fixed expenses increase by $6,000, and the number of units sold decreases by 3%? 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 13%?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Miller Company’s contribution format income statement for the most recent month is shown below:
| Total | Per Unit | |
|---|---|---|
| Sales (36,000 units) | $ 180,000 | $ 5.00 |
| Variable expenses | 72,000 | 2.00 |
| Contribution margin | 108,000 | $ 3.00 |
| Fixed expenses | 43,000 | |
| Net operating income | $ 65,000 |
Required:
(Consider each case independently):
1. What is the revised net operating income if unit sales increase by 17%?
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 24%?
3. What is the revised net operating income if the selling price increases by $1.30 per unit, fixed expenses increase by $6,000, and the number of units sold decreases by 3%?
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 13%?
(ONLY QUESTION 3 & 4 NEEDS AN ANSWER.)
Transcribed Image Text:Miller Company's contribution format income statement for the most recent month is shown below:
| | Total | Per Unit |
|------------------------------|--------------|-----------|
| Sales (36,000 units) | $180,000 | $5.00 |
| Variable expenses | 72,000 | $2.00 |
| Contribution margin | 108,000 | $3.00 |
| Fixed expenses | 43,000 | |
| Net operating income | $65,000 | |
**Required:**
(Consider each case independently):
1. What is the revised net operating income if unit sales increase by 17%?
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 24%?
3. What is the revised net operating income if the selling price increases by $1.30 per unit, fixed expenses increase by $6,000, and the number of units sold decreases by 3%?
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 13%?
Transcribed Image Text:**Required:**
(Consider each case independently):
1. What is the revised net operating income if unit sales increase by 17%?
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 24%?
3. What is the revised net operating income if the selling price increases by $1.30 per unit, fixed expenses increase by $6,000, and the number of units sold decreases by 3%?
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 13%?
**Answer is not complete.**
| | Net operating income |
|---|-----------------------|
| 1. | $83,360 |
| 2. | $32,888 |
| 3. | $144,156 |
| 4. | |
- The table shows calculations of net operating income for each scenario, with outcome 2 being correct, indicated by a check mark.
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