Question

Miller Company’s contribution format income statement for the most recent month is shown below:

Sales (37,000 units)	$	259,000		$	7.00
Variable expenses		148,000			4.00
Contribution margin		111,000		$	3.00
Fixed expenses		42,000
Net operating income	$	69,000

Consider each case independently):

1. What is the revised net operating income if unit sales increase by 19%?

2. What is the revised net operating income if the selling price decreases by $1.40 per unit and the number of units sold increases by 18%?

3. What is the revised net operating income if the selling price increases by $1.40 per unit, fixed expenses increase by $8,000, and the number of units sold decreases by 3%?

4. What is the revised net operating income if the selling price per unit increases by 10%, variable expenses increase by 20 cents per unit, and the number of units sold decreases by 11%?

Answer 1