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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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  1. 16 February, 01:00
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    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
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