Total Per Unit Sales (8,800 units) $ 308,000 $ 35.00 Variable expenses 167,200 19.00 Contribution margin 140,800 $ 16.00 Fixed expenses 54,700 Net operating income $ 86,100 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 60 units? 2. What would be the revised net operating income per month if the sales volume decreases by 60 units? 3. What would be the revised net operating income per month if the sales volume is 7,800 units?
You calculated for 80 unites when it was 60 units and for number 3 it was 7800
Whirly Corporation’s contribution format income statement for the most recent month is shown below:
| Total | Per Unit | |
|---|---|---|
| Sales (8,800 units) | $ 308,000 | $ 35.00 |
| Variable expenses | 167,200 | 19.00 |
| Contribution margin | 140,800 | $ 16.00 |
| Fixed expenses | 54,700 | |
| Net operating income | $ 86,100 |
Required:
(Consider each case independently):
1. What would be the revised net operating income per month if the sales volume increases by 60 units?
2. What would be the revised net operating income per month if the sales volume decreases by 60 units?
3. What would be the revised net operating income per month if the sales volume is 7,800 units?
Cost-volume-profit (CVP) analysis, also known as break-even analysis, is a crucial financial management tool that provides insights into a company's financial performance and helps managers make informed decisions.
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