Answered

Miller Company’s contribution format income statement for the most recent month is shown below:Total Per UnitSales (33,000 units) $ 330,000 $ 10.00 Variable expenses 231,000 7.00 Contribution margin 99,000 $ 3.00 Fixed expenses 50,000 Net operating income $ 49,000 Required:(Consider each case independently):1. What is the revised net operating income if unit sales increase by 13%?2. What is the revised net operating income if the selling price decreases by $1.20 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 $1.20 per unit, fixed expenses increase by $7,000, and the number of units sold decreases by 4%?4. What is the revised net operating income if the selling price per unit increases by 10%, variable expenses increase by 30 cents per unit, and the number of units sold decreases by 12%?

Answer :

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Sales (33,000 units*$10) $ 330,000

Variable expenses 231,000 ($7.00)

Contribution margin 99,000 ($ 3.00)

Fixed expenses 50,000

Net operating income $ 49,000

1) Increase in units= 13%

Sales= (37,290*10)= 372,900

Variable cost= (37,290*7)= 261,030

Contribution margin= 111,870

Fixed costs= 50,000

Net operating income= $61,870

2) Price= 8.80

Units= 33,000*1.24= 40,920

Contribution margin= (8.8 - 7)* 40,920= 73,656

Fixed costs= 50,000

Net operating income= 23,656

3) Selling price= 11.20

Fixed expense= 57,000

Units= 33,000¨1.04= 34,320

Contribution margin= (11.2 - 7)*34,320= 144,144

Fixed costs= 57,000

Net operatign income= $87,144

4) Selling price= 11

Variable cost= 7.30

Units= 33000*0.88= 29,040

Income= (11-7.30)*29040 - 50,000= $57,448

Other Questions