Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (8,100 units) $ 251,100 $ 31.00 Variable expenses 145,800 18.00 Contribution margin 105,300 $ 13.00 Fixed expenses 54,600 Net operating income $ 50,700 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 80 units? 2. What would be the revised net operating income per month if the sales volume decreases by 80 units? 3. What would be the revised net operating income per month if the sales volume is 7,100 units?
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (8,100 units) $ 251,100 $ 31.00 Variable expenses 145,800 18.00 Contribution margin 105,300 $ 13.00 Fixed expenses 54,600 Net operating income $ 50,700 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 80 units? 2. What would be the revised net operating income per month if the sales volume decreases by 80 units? 3. What would be the revised net operating income per month if the sales volume is 7,100 units?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Exercise 6-1 The Effect of Changes in Activity on Net Operating Income [LO6-1]
Whirly Corporation’s contribution format income statement for the most recent month is shown below:
| Total | Per Unit | |||||
| Sales (8,100 units) | $ | 251,100 | $ | 31.00 | ||
| Variable expenses | 145,800 | 18.00 | ||||
| Contribution margin | 105,300 | $ | 13.00 | |||
| Fixed expenses | 54,600 | |||||
| Net operating income | $ | 50,700 | ||||
Required:
(Consider each case independently):
1. What would be the revised net operating income per month if the sales volume increases by 80 units?
2. What would be the revised net operating income per month if the sales volume decreases by 80 units?
3. What would be the revised net operating income per month if the sales volume is 7,100 units?
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