Whirly Corporation's contribution format income statement for the most recent month is shown below: Total Per Unit Sales (8,000 units) $ 248,000 $ 31.00 Variable expenses 144,000 18.00 Contribution margin 104,000 $ 13.00 Fixed expenses 55,700 Net operating income $ 48,300 Required: (Consider each case independently) : 1. What would be the revised net operating income per month if the sales volume increases by 90 units

Question

Jaylan Orozco

Business

27 December, 21:58

Whirly Corporation's contribution format income statement for the most recent month is shown below: Total Per Unit Sales (8,000 units) $ 248,000 $ 31.00 Variable expenses 144,000 18.00 Contribution margin 104,000 $ 13.00 Fixed expenses 55,700 Net operating income $ 48,300 Required: (Consider each case independently) : 1. What would be the revised net operating income per month if the sales volume increases by 90 units

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Answers (1)

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Kiley Ritter · Answer 1

An increase in sale for 90 units, will increase the net income for 1$,170

Explanation:

We are not given with any information of additional cost or special price for this units, so we use the current values.

So we simply multiply the contribution per unit by the increase in sale.

Contribution Margin x Δ sales = Δ income

13 x 90 = 1,170

Each unit contributes with 13 additional income, there are 90 additional units

Total income added 1,170