Miller Company's contribution format income statement for the most recent month is shown below: Total Per Unit Sales (20,000 units) $ 300,000 $ 15.00 Variable expenses 180,000 9.00 Contribution margin 120,000 $ 6.00 Fixed expenses 70,000 Net operating income $ 50,000 Required: (Consider each case independently) : 1. What is the revised net operating income if unit sales increase by 15%? 2. What is the revised net operating income if the selling price decreases by $1.50 per unit and the number of units sold increases by 25%? 3. What is the revised net operating income if the selling price increases by $1.50 per unit, fixed expenses increase by $20,000, and the number of units sold decreases by 5%? 4. What is the revised net operating income if the selling price per unit increases by 12%, variable expenses increase by 60 cents per unit, and the number of units sold decreases by 10%?

Answers are 1. $95.000 2. $42.500 3. $ 50.000 4. $59.600

Explanation:

In each case you have to replace the data with the given information

1 If unit sales increase 15%

Units price Total

Revenue 20,000.00 17.25 345,000.00

Variable Man 20,000.00 9.00 (180,000.00)

Contribution margin 20,000.00 8.25 165,000.00

Fixed expenses 20,000.00 3.50 (70,000.00)

Net income 95,000.00

2 If price decreases by $1.5 and units sold increases by 25%

Units price Total

Revenue 25,000.00 13.50 337,500.00

Variable Man 25,000.00 9.00 (225,000.00)

Contribution margin 25,000.00 4.50 112,500.00

Fixed expenses 25,000.00 2.80 (70,000.00)

Net income 42,500.00

3 If price increases by $1.5 and fixed expenses by $20.000

Units price Total

Revenue 20,000.00 16.50 330,000.00

Variable Man 20,000.00 9.00 (180,000.00)

Contribution margin 20,000.00 7.50 150,000.00

Fixed expenses 20,000.00 5.00 (100,000.00)

Net income 50,000.00

4 Units price Total

Revenue 18,000.00 16.80 302,400.00

Variable Man 18,000.00 9.60 (172,800.00)

Contribution margin 18,000.00 7.20 129,600.00

Fixed expenses 18,000.00 3.89 (70,000.00)

Net income 59,600.00