Total Per Unit Sales (20,000 units) Variable expenses.. Contribution margin $300,000 $15.00 120,000 $ 6.00 Fixed expenses .. Net operating income.. 70,000 $ 50,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Changes in Selling Price, Sales Volume, Variable Cost per Unit, and Total Fixed Costs

Miller Company’s contribution format income statement for the most recent month is shown below:

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 $1.50 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 $1.50 per unit, fixed expenses increase by $20,000, and the number of units sold decreases by 5%?

4. What is the revised net operating income if the selling price per unit increases by 12%, variable expenses increase by 60 cents per unit, and the number of units sold decreases by 10%?

Total
Per Unit
Sales (20,000 units)
Variable expenses..
Contribution margin
$300,000 $15.00
120,000 $ 6.00
Fixed expenses ..
Net operating income..
70,000
$ 50,000
Transcribed Image Text:Total Per Unit Sales (20,000 units) Variable expenses.. Contribution margin $300,000 $15.00 120,000 $ 6.00 Fixed expenses .. Net operating income.. 70,000 $ 50,000
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