Sales (13,000 units × $20 per unit) $ 260,000 Variable expenses 156,000 Contribution margin 104,000 Fixed expenses 116,000 Net operating loss $ (12,000) 20,100 Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $56,000 each month. Assume that the company expects to sell 20,100 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percentage basis, as well as in total, for each alternative.) (Do not round your intermediate calculations. Round your percentage answers to the nearest whole number.)
Sales (13,000 units × $20 per unit) $ 260,000 Variable expenses 156,000 Contribution margin 104,000 Fixed expenses 116,000 Net operating loss $ (12,000) 20,100 Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $56,000 each month. Assume that the company expects to sell 20,100 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percentage basis, as well as in total, for each alternative.) (Do not round your intermediate calculations. Round your percentage answers to the nearest whole number.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sales (13,000 units × $20 per unit) $ 260,000
Variable expenses 156,000 Contribution margin
104,000 Fixed expenses 116,000 Net operating
loss $ (12,000) 20,100 Refer to the original data. By
automating, the company could reduce variable
expenses by $3 per unit. However, fixed expenses
would increase by $56,000 each month. Assume
that the company expects to sell 20,100 units next
month. Prepare two contribution format income
statements, one assuming that operations are not
automated and one assuming that they are. (Show
data on a per unit and percentage basis, as well as
in total, for each alternative.) (Do not round your
intermediate calculations. Round your percentage
answers to the nearest whole number.)
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