Question

Chapter 6 Question 1:

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		160,200			18.00
Contribution margin		142,400		$	16.00
Fixed expenses		55,000
Net operating income	$	87,400

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 decreases by 30 units?

3. What would be the revised net operating income per month if the sales volume is 7,900 units?

Answer 1