Sunshine Corporation's contribution format income statement for October is shown below.$228,000102,000126,000Sales (24,000 units)Variable expensesContribution marginFixed expensesNet operating income54,000$ 72,000Sunshine is considering a major marketing plan, increasing advertising by $40,000 and droppingthe selling price by $1.30/unit. If the action results in an increase in sales of 12,000 units, whatwould be the new net operating income?

Operating income: It implies to the income generated by a business after subtracting all the direct…

Sunshine Corporation's contribution format income statement for October is shown below. $228,000 Sales (24,000 units) Variable expenses 102,000 Contribution margin 126,000 54,000 $ 72,000 Fixed expenses Net operating income Sunshine is considering a major marketing plan, increasing advertising by $40,000 and dropping the selling price by $1.30/unit. If the action results in an increase in sales of 12,000 units, what would be the new net operating income?

Sunshine Corporation's contribution format income statement for October is shown below. $228,000 Sales (24,000 units) Variable expenses 102,000 Contribution margin 126,000 54,000 $ 72,000 Fixed expenses Net operating income Sunshine is considering a major marketing plan, increasing advertising by $40,000 and dropping the selling price by $1.30/unit. If the action results in an increase in sales of 12,000 units, what would be the new net operating income?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Victoria Company reports the following operating results for the month of April. VICTORIA COMPANY CVP Income Statement For the Month Ended April 30, 2020 Sales (10,000 units) Variable costs Contribution margin Fixed expenses Net income $500,000 300,000 Break-even point Break-even point $ Total Show Transcribed Text Margin of safety $ Break-even point 200,000 Management is considering the following course of action to increase net income: Reduce the selling price by 5%, with no changes to unit variable costs or fixed costs. Management is confident that this change will increase unit sales by 10%. Break-even point 140,000 Using the contribution margin technique, compute the break-even point in units and dollars and margin of safety in dollars: (Round intermediate calculations to 4 decimal places eg. 0.2522 and final answer to 0 decimal places, e.g. 2,510) (a) Assuming no changes to selling price or costs. $60,000 $ Using the contribution margin technique, compute the break-even point in…
Whirly Corporation's contribution format income statement for the most recent month is shown below: Per Unit $ 33.00 19.00 $ 14.00 Sales (8,500 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 280,500 161,500 119,000 54,700 $ 64,300 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 70 units? 2. What would be the revised net operating income per month if the sales volume decreases by 70 units? 3. What would be the revised net operating income per month if the sales volume is 7,500 units? 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income
Green Valley Corp.'s contribution format income statement for the most recent month follows: Sales $ 506,000 Variable expenses 236,500 Contribution margin 269,500 Fixed expenses 241,700 Net operating income $ 27,800 Required: a. Compute the degree of operating leverage to two decimal places. b. Using the degree of operating leverage, estimate the percentage change in net operating income that should result from a 3% increase in sales. c. If Green Valley’s competitor Black Mountain Inc. has a degree of operating leverage as 8, which company has the higher operating risk?
Miller Company’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (33,000 units) $ 297,000 $ 9.00 Variable expenses 198,000 6.00 Contribution margin 99,000 $ 3.00 Fixed expenses 43,000 Net operating income $ 56,000 Required: (Consider each case independently): 1. What is the revised net operating income if unit sales increase by 14%? 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 17%? 3. What is the revised net operating income if the selling price increases by $1.30 per unit, fixed expenses increase by $9,000, and the number of units sold decreases by 6%? 4. What is the revised net operating income if the selling price per unit increases by 10%, variable expenses increase by 20 cents per unit, and the number of units sold decreases by 7%? 1. net operatin income = 2. net operatin…
Bramble Company reports the following operating results for the month of August: sales $300,000 (units 5,000); variable costs $217,000; and fixed costs $70,000. Management is considering the following independent courses of action to increase net income.Compute the net income to be earned under each alternative.1. Increase selling price by 10% with no change in total variable costs or sales volume. Net income $enter a net income if the selling price is increased by 10% 2. Reduce variable costs to 55% of sales. Net income $enter a net income if the variable costs are reduced to 55% of sales 3. Reduce fixed costs by $18,000. Net income $enter a net income if the fixed costs are reduced by $18,000
Whirly Corporation's contribution format income statement for the most recent month is shown below: Total $ 268,600 150, 100 118,500 54,300 Per Unit $ 34.00 19.00 $ 15.00 $ 64,200 Sales (7,900 units) Variable expenses Contribution margin Fixed expenses Net operating income. Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 30 units? 2. What would be the revised net operating income per month if the sales volume decreases by 30 units? 3. What would be the revised net operating income per month if the sales volume is 6,900 units? 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income
Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (8,400 units) Variable expenses Contribution margin Total $ 260,400 159,600 Per Unit $ 31.00 19.00 $ 12.00 100,800 Fixed expenses Net operating income 55,300 $ 45,500 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 90 units?
Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (7,600 unita) Variable expenses Total $ 243,200 136, 800 Per Unit $32.00 18.00 Contribution nargin 106,400 $ 14.00 ried expenses 55,000 5 51,400 et operating Lncone Required: (Consider each case independently): 1 What would be the revised net operating income per month if the sales volume increases by 50 units? 2 What would be the revised net operating income per month if the sales volume decreases by 50 units? 3. What would be the revised net operating income per month if the sales volume is 6,600 units? 1. Revined net operating income 2. Revised net operating income 3. Revised net operating income
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%?
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (8,000 units) $ 240,000 $ 30.00 Variable expenses 152,000 19.00 Contribution margin 88,000 $ 11.00 Fixed expenses 55,000 Net operating income $ 33,000 Can you please help me solve for the following: A. What would be the revised net operating income per month if the sales volume increases by 60 units? B. What would be the revised net operating income per month if the sales volume decreases by 60 units? C. What would be the revised net operating income per month if the sales volume is 7,000 units?