Exercise 5-13 (Algo) Changes in Selling Price, Sales Volume, Variable Cost per Unit, and Total Fixed Costs [LO5-1, LO5-4]
Miller Company’s contribution format income statement for the most recent month is shown below:
Total | Per Unit | |
---|---|---|
Sales (30,000 units) | $ 240,000 | $ 8.00 |
Variable expenses | 150,000 | 5.00 |
Contribution margin | 90,000 | $ 3.00 |
Fixed expenses | 50,000 | |
Net operating income | $ 40,000 |
Required:
(Consider each case independently):
1. What is the revised net operating income if unit sales increase by 15%?
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 25%?
3. What is the revised net operating income if the selling price increases by $1.10 per unit, fixed expenses increase by $8,000, 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 10%?
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- Problem 12-21 (Algo) Prepare a contribution margin format income statement; answer what-if questions LO 12-7, 12-8, 12-9 Shown here is an income statement in the traditional format for a firm with a sales volume of 7,500 units. Cost formulas also are shown: Revenues Cost of goods sold ($5,900 + $2.25/unit) Gross profit Operating expenses: Selling ($1,200 + $0.10/unit) Administrative ($3,500 + $0.20/unit) Operating income $34,400 22,775 $ 11,625 1,950 5,000 $ 4,675 Required: a. Prepare an income statement in the contribution margin format. b. Calculate the contribution margin per unit and the contribution margin ratio. c. Calculate the firm's operating income (or loss) if the volume changed from 7,500 units to 1. 11,250 units. 2. 3,750 units. d. Refer to your answer to part a for total revenues of $34,400. Calculate the firm's operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues 1. Increase by $14,500. 2. Decrease by $3,000.arrow_forwardHudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (10,500 units at $225 each) Variable costs (10,500 units at $180 each) Contribution margin Fixed costs Income $ 2,362,500 1,890,000 472,500 369,000 $ 103,500 Exercise 5-18 (Algo) Evaluating strategies-price increase LO C2 If the company raises its selling price to $240 per unit. 1. Compute Hudson Company's contribution margin per unit. 2. Compute Hudson Company's contribution margin ratio. 3. Compute Hudson Company's break-even point in units. 4. Compute Hudson Company's break-even point in sales dollars. 1. Contribution margin 2. Contribution margin ratio 3. Break-even in units 4. Break-even sales dollars per unit % unitsarrow_forwardch7-50 Jellico Inc.'s projected operating income (based on sales of 450,000 units) for the coming year is as follows: Total Sales $ 12,150,000 Total variable cost 7,533,000 Contribution margin $ 4,617,000 Total fixed cost 2,875,878 Operating income $ 1,741,122 Required: 1(a). Compute variable cost per unit. Enter your answer to the nearest cent.$per unit 1(b). Compute contribution margin per unit. Enter your answer to the nearest cent.$per unit 1(c). Compute contribution margin ratio. % 1(d). Compute break-even point in units. units 1(e). Compute break-even point in sales dollars.$ 2. How many units must be sold to earn operating income of $376,542? units 3. Compute the additional operating income that Jellico would earn if sales were $50,000 more than expected.$ 4. For the projected level of sales, compute the margin of safety in units, and then in sales dollars. Margin of safety in units units Margin of safety in sales dollars $ 5. Compute the degree…arrow_forward
- Required information Skip to question [The following information applies to the questions displayed below.] Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales $ 25, 700 Variable expenses 13,900 Contribution margin 11, 800 Fixed expenses 7, 788 Operating income $ 4,012 7. If the variable cost per unit increases by $0.60, spending on advertising increases by $1,100, and unit sales increase by 250 units, what would be the operating income? (Do not round intermediate calculations.)arrow_forwardHudson Company reports the following contribution margin income statement. \table[[\table[[HUDSON COMPANY], [Contribution Margin Income Sta], [For Year Ended December 3]],], [\table [[Sales units at $225 each)], [Variable costs units at $180 each)], [Contribution margin], [Fixed costs]],\table[[$2,160,000arrow_forwardPlease do not give solution in image format thankuarrow_forward
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