Whirly Corporation's contribution format income statement for the most recent month is shown below: Total Per Unit Sales (7,400 units) $ 229,400 $ 31.00 Variable expenses 133,200 18.00 Contribution margin 96,200 $ 13.00 Fixed expenses 55,100 Net operating income $ 41,100 Required: (Consider each case independently) : 1. What would be the revised net operating income per month if the sales volume increases by 40 units? 2. What would be the revised net operating income per month if the sales volume decreases by 40 units? 3. What would be the revised net operating income per month if the sales volume is 6,400 units?

Question

Leo Burton

Business

16 February, 00:38

Whirly Corporation's contribution format income statement for the most recent month is shown below: Total Per Unit Sales (7,400 units) $ 229,400 $ 31.00 Variable expenses 133,200 18.00 Contribution margin 96,200 $ 13.00 Fixed expenses 55,100 Net operating income $ 41,100 Required: (Consider each case independently) : 1. What would be the revised net operating income per month if the sales volume increases by 40 units? 2. What would be the revised net operating income per month if the sales volume decreases by 40 units? 3. What would be the revised net operating income per month if the sales volume is 6,400 units?

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Answers (1)

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Gummi Bear · Answer 1

1. $41,100

2. $40,580

3. $28,100

Explanation:

1. Sales volume increase by 40 units

Total sales $229,400

7,440 * $31

Less: Variable Expense $133,200

7,440 * $18

Contribution margin $96,200

Less: Fixed expenses $55,100

Net operating income $41,100

2. Sales volume decreases by 40 units

Sales Volume $228,160

7,360 * $31

Less: Variable expense $132,480

7,360 * $18

Contribution margin $95,680

Less: Fixed expenses $55,100

Net operating income $40,580

3. Sales volume is 6,400 units

Total sales $198,400

6,400 * $31

Less: Variable expense $115,200

6,400 * $18

Contribution margin $83,200

Less: Fixed expenses $55,100

Net operating income $28,100