Question

In: Accounting

Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per...

Whirly Corporation’s contribution format income statement for the most recent month is shown below:

Total Per Unit
Sales (7,200 units) $ 230,400 $ 32.00
Variable expenses 136,800 19.00
Contribution margin 93,600 $ 13.00
Fixed expenses 54,700
Net operating income $ 38,900

(Consider each case independently):

1. What would be the revised net operating income per month if the sales volume increases by 80 units?

2. What would be the revised net operating income per month if the sales volume decreases by 80 units?

3. What would be the revised net operating income per month if the sales volume is 6,200 units?

Solutions

Expert Solution

Ans. 1 New sales volume (7,200 + 80) = 7,280 units
*Fixed costs remain constant on each level of sales.
Total Per unit
Sales (7,280 *p) $232,960 $32.00
Variable expenses (7,280 * v) -$138,320 -$19.00
Contribution margin $94,640 $13.00
Fixed expenses -$54,700
Revised net operating income $39,940
P   =   price per unit
V = variable cost per unit
Ans. 2 New sales volume (7,200 - 80) = 7,120 units
Total Per unit
Sales (7,120 *p) $227,840 $32.00
Variable expenses (7,120 * v) -$135,280 -$19.00
Contribution margin $92,560 $13.00
Fixed expenses -$54,700
Revised net operating income $37,860
P   =   price per unit
V = variable cost per unit
Ans. 3 New sales volume = 6,200 units
Total Per unit
Sales (6,200 *p) $198,400 $32.00
Variable expenses (6,200 * v) -$117,800 -$19.00
Contribution margin $80,600 $13.00
Fixed expenses -$54,700
Revised net operating income $25,900
P   =   price per unit
V = variable cost per unit

Related Solutions

Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per...
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (7,700 units) $ 231,000 $ 30.00 Variable expenses 154,000 20.00 Contribution margin 77,000 $ 10.00 Fixed expenses 54,100 Net operating income $ 22,900 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 30 units? 2. What would be the revised net operating income per month if the sales volume...
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per...
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (8,300 units) $ 282,200 $ 34.00 Variable expenses 157,700 19.00 Contribution margin 124,500 $ 15.00 Fixed expenses 54,300 Net operating income $ 70,200 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 90 units? 2. What would be the revised net operating income per month if the sales volume...
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per...
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (7,500 units) $ 240,000 $ 32.00 Variable expenses 150,000 20.00 Contribution margin 90,000 $ 12.00 Fixed expenses 55,600 Net operating income $ 34,400 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 80 units? 2. What would be the revised net operating income per month if the sales volume...
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per...
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (7,900 units) $ 244,900 $ 31.00 Variable expenses 158,000 20.00 Contribution margin 86,900 $ 11.00 Fixed expenses 54,100 Net operating income $ 32,800 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 80 units? 2. What would be the revised net operating income per month if the sales volume...
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per...
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (8,200 units) $ 254,200 $ 31.00 Variable expenses 155,800 19.00 Contribution margin 98,400 $ 12.00 Fixed expenses 55,500 Net operating income $ 42,900 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 50 units? 2. What would be the revised net operating income per month if the sales volume...
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per...
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (8,700 units) $ 304,500 $ 35.00 Variable expenses 165,300 19.00 Contribution margin 139,200 $ 16.00 Fixed expenses 55,800 Net operating income $ 83,400 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 60 units? 2. What would be the revised net operating income per month if the sales volume...
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per...
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (8,900 units) $ 302,600 $ 34.00 Variable expenses 169,100 19.00 Contribution margin 133,500 $ 15.00 Fixed expenses 55,600 Net operating income $ 77,900 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 60 units? 2. What would be the revised net operating income per month if the sales volume...
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per...
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (7,600 units) $ 258,400 $ 34.00 Variable expenses 144,400 19.00 Contribution margin 114,000 $ 15.00 Fixed expenses 54,400 Net operating income $ 59,600 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 80 units? 2. What would be the revised net operating income per month if the sales volume...
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per...
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (7,600 units) $ 243,200 $ 32.00 Variable expenses 152,000 20.00 Contribution margin 91,200 $ 12.00 Fixed expenses 55,700 Net operating income $ 35,500 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 80 units? 2. What would be the revised net operating income per month if the sales volume...
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per...
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (7,600 units) $ 243,200 $ 32.00 Variable expenses 144,400 19.00 Contribution margin 98,800 $ 13.00 Fixed expenses 55,700 Net operating income $ 43,100 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 50 units? 2. What would be the revised net operating income per month if the sales volume...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT