Miller Company's contribution format income statement for the most recent month is shown below: Total Per Unit Sales (32,000 units) $ 192,000 $ 6.00 Variable expenses 96,000 3.00 Contribution margin 96,000 $ 3.00 Fixed expenses 49,000 Net operating income $ 47,000 Required: (Consider each case independently) : 1. What is the revised net operating income if unit sales increase by 12%? 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 17%? 3. What is the revised net operating income if the selling price increases by $1.50 per unit, fixed expenses increase by $6,000, 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 20%, variable expenses increase by 20 cents per unit, and the number of units sold decreases by 6%?

Question

Business

Victor Summers

14 July, 22:27

Miller Company's contribution format income statement for the most recent month is shown below: Total Per Unit Sales (32,000 units) $ 192,000 $ 6.00 Variable expenses 96,000 3.00 Contribution margin 96,000 $ 3.00 Fixed expenses 49,000 Net operating income $ 47,000 Required: (Consider each case independently) : 1. What is the revised net operating income if unit sales increase by 12%? 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 17%? 3. What is the revised net operating income if the selling price increases by $1.50 per unit, fixed expenses increase by $6,000, 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 20%, variable expenses increase by 20 cents per unit, and the number of units sold decreases by 6%?

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Answers (1)

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Clinton Lester · Answer 1

Answer is given below:

Explanation:

Answer-

1 Net operating income $63480

2 Net operating income $22968

3 Net operating income $73336

4 Net operating income $41400

Explanation-

Miller Company

Operating income

Particulars Amount $

Sales (32000 units*1.13) * $6 per unit 216960

Less: - Variable cost 36160 units*$3 per unit 108480

Contribution 108480

Less: - Fixed costs 45000

Net operating income 63480

Miller Company

Operating income

Particulars Amount $

Sales (32000 units*1.18) * ($6 per unit-$1.20 per unit) 181248

Less: - Variable cost 37760 units*$3 per unit 113280

Contribution 67968

Less: - Fixed costs 45000

Net operating income 22968

Miller Company

Operating income

Particulars Amount $

Sales (32000 units*94%) * ($6 per unit+$1.20 per unit) 216576

Less: - Variable cost 28200 units*$3 per unit 90240

Contribution 126336

Less: - Fixed costs (45000+8000) 53000

Net operating income 73336

Miller Company

Operating income

Particulars Amount $

Sales (32000 units*90%) * ($6 per unit*1.10) 190080

Less: - Variable cost 28800 units * ($3 per unit*1.20) 103680

Contribution 86400

Less: - Fixed costs 45000

Net operating income 41400