Kelly Company’s most recent contribution format income statement is shown below: Total Per Unit Sales (50,000...

Kelly Company’s most recent contribution format income statement is shown below:

	Total		Per Unit
Sales (50,000 units)	$	700,000	$	14
Variable costs		300,000		6

Contribution margin		400,000	$	8

Fixed costs		240,000

Operating income	$	160,000

Required:

Prepare a new contribution format income statement with a per unit column under each of the following conditions (consider each case independently):

The selling price increases by $1 per unit, fixed costs increase by $20,000, and the number of units sold decreases by 10%. Would this change be beneficial to the company? Briefly explain. ( 4 marks)

Return to the original data. Variable costs increase by 60 cents per unit, the selling price increases by 15%, and the number of units sold decreases by 15%. Would this change be beneficial to the company? Briefly explain. ( 4 marks)

Return to the original data. The selling price decreases by $2 per unit, fixed costs decrease by $30,000, and the variable costs per unit increases by 10%. Would this change be beneficial to the company? Briefly explain. ( 4 marks)

Return to the original data. The number of units sold decreases by 5%, fixed costs increase by 10%, and the variable costs per unit decreases by $4 per unit. Would this change be beneficial to the company? Briefly explain. ( 4 marks)

i need this answer as soon as possible please

Solutions

Expert Solution

ekkarill92 answered 10 months ago

Next > < Previous

Related Solutions

Miller Company’s most recent contribution format income statement is shown below: Total Per Unit Sales...

Miller Company’s most recent contribution format income statement is shown below: Total Per Unit Sales (33,000 units) $330,000 $10.00 Variable expenses 231,000 7.00 Contribution margin 99,000 $3.00 Fixed expenses 40,000 Net operating income $ 59,000 Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently): (Do not round intermediate calculations. Round your "Per unit" answers to 2 decimal places.) 1. The number of units sold increases by 16%. 2....

Miller Company’s most recent contribution format income statement is shown below: Total Per Unit Sales (31,000...

Miller Company’s most recent contribution format income statement is shown below: Total Per Unit Sales (31,000 units) $217,000 $7.00 Variable expenses 124,000 4.00 Contribution margin 93,000 $3.00 Fixed expenses 48,000 Net operating income $ 45,000 Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently): (Do not round intermediate calculations. Round your "Per unit" answers to 2 decimal places.) 1. The number of units sold increases by 10%. 2. The selling...

Miller Company’s most recent contribution format income statement is shown below: Total Per Unit Sales (32,000...

Miller Company’s most recent contribution format income statement is shown below: Total Per Unit Sales (32,000 units) $320,000 $10.00 Variable expenses 224,000 7.00 Contribution margin 96,000 $3.00 Fixed expenses 43,000 Net operating income $ 53,000 1. The number of units sold increases by 19%. 2. The selling price decreases by $1.20 per unit, and the number of units sold increases by 21%. 3. The selling price increases by $1.20 per unit, fixed expenses increase by $8,000, and the number of...

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

Miller Company’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (44,000 units) $ 396,000 $ 9.00 Variable expenses 264,000 6.00 Contribution margin 132,000 $ 3.00 Fixed expenses 47,000 Net operating income $ 85,000 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...

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

Miller Company’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (38,000 units) $ 342,000 $ 9.00 Variable expenses 228,000 6.00 Contribution margin 114,000 $ 3.00 Fixed expenses 47,000 Net operating income $ 67,000 Required: (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 $1.20 per unit and the number...

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

Miller Company’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (32,000 units) $ 160,000 $ 5.00 Variable expenses 64,000 2.00 Contribution margin 96,000 $ 3.00 Fixed expenses 46,000 Net operating income $ 50,000 Required: (Consider each case independently): 1. What is the revised net operating income if unit sales increase by 17%? 2. What is the revised net operating income if the selling price decreases by $1.20 per unit and the number...

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

Miller Company’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (31,000 units) $ 186,000 $ 6.00 Variable expenses 93,000 3.00 Contribution margin 93,000 $ 3.00 Fixed expenses 49,000 Net operating income $ 44,000 Required: (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 $1.50 per unit and the number...

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

Miller Company’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (33,000 units) $ 231,000 $ 7.00 Variable expenses 132,000 4.00 Contribution margin 99,000 $ 3.00 Fixed expenses 48,000 Net operating income $ 51,000 Required: (Consider each case independently): 1. What is the revised net operating income if unit sales increase by 11%? 2. What is the revised net operating income if the selling price decreases by $1.40 per unit and the...

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

Miller Company’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (36,000 units) $ 216,000 $ 6.00 Variable expenses 108,000 3.00 Contribution margin 108,000 $ 3.00 Fixed expenses 41,000 Net operating income $ 67,000 Required: (Consider each case independently): 1. What is the revised net operating income if unit sales increase by 17%? 2. What is the revised net operating income if the selling price decreases by $1.20 per unit and the number...

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

Miller Company’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (34,000 units) $ 238,000 $ 7.00 Variable expenses 136,000 4.00 Contribution margin 102,000 $ 3.00 Fixed expenses 47,000 Net operating income $ 55,000 Required: (Consider each case independently): 1. What is the revised net operating income if unit sales increase by 11%? 2. What is the revised net operating income if the selling price decreases by $1.40 per unit and the number...

Subjects