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%?

Question

Cosmo

Business

15 June, 05:22

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%?

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Answers (1)

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Camden Bean · Answer 1

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