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 $7.00Contribution 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

Heidy Dunlap

Business

18 July, 01:41

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 $7.00Contribution 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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Josue Schneider · Answer 1

Instructions are listed below.

Explanation:

Giving the following information:

Sales (33,000 units for $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 sales = 13%

Income = (33,000*1.13) * $3 - 50,000 = $61,870

2) Price = $8.8

Units sale = 33,000*1.24 = 40,920

Income = (8.8 - 7) * 40,920 - 50,000 = $23,656

3) Price = 11.2

Sales = 33,000*0.96 = 31,680

Fixed costs = 57,000

Income = (11.2 - 7) * 31,680 - 57,000 = $76,056

4) Price = 11

Variable cost = 7.3

Sales = 33,000*0.88 = 29,040

Income = (11-7.3) * 29,040 - 50,000 = $57,448