Miller Company’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (40,000 units) $ 280,000 $ 7.00 Variable expenses 160,000 4.00 Contribution margin 120,000 $ 3.00 Fixed expenses 47,000 Net operating income $ 73,000 Required: (Consider each case independently): 1. What is the revised net operating income if unit sales increase by 13%? 2. What is the revised net operating income if the selling price decreases by $1.10 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 $1.10 per unit, fixed expenses increase by $9,000, and the number of units sold decreases by 8%? 4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 20 cents per unit, and the number of units sold decreases by 14%?
Miller Company’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (40,000 units) $ 280,000 $ 7.00 Variable expenses 160,000 4.00 Contribution margin 120,000 $ 3.00 Fixed expenses 47,000 Net operating income $ 73,000 Required: (Consider each case independently): 1. What is the revised net operating income if unit sales increase by 13%? 2. What is the revised net operating income if the selling price decreases by $1.10 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 $1.10 per unit, fixed expenses increase by $9,000, and the number of units sold decreases by 8%? 4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 20 cents per unit, and the number of units sold decreases by 14%?
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 (40,000 units) | $ | 280,000 | $ | 7.00 | ||
| Variable expenses | 160,000 | 4.00 | ||||
| Contribution margin | 120,000 | $ | 3.00 | |||
| Fixed expenses | 47,000 | |||||
| Net operating income | $ | 73,000 | ||||
Required:
(Consider each case independently):
1. What is the revised net operating income if unit sales increase by 13%?
2. What is the revised net operating income if the selling price decreases by $1.10 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 $1.10 per unit, fixed expenses increase by $9,000, and the number of units sold decreases by 8%?
4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 20 cents per unit, and the number of units sold decreases by 14%?
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