Miller Company’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (41,000 units) $ 246,000 $ 6.00 Variable expenses 123,000 3.00 Contribution margin 123,000 $ 3.00 Fixed expenses 44,000 Net operating income $ 79,000 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 $1.10 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 $1.10 per unit, fixed expenses increase by $6,000, and the number of units sold decreases by 4%? 4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 40 cents per unit, and the number of units sold decreases by 8%?
1. What is the revised net operating income if unit sales increase by 11%?
The number of units sold increases by 11%.
Revised number of units
=41000+ (41000x11%)
=45,510 units
Total 
Per unit 

sales (45,5510 unitsx6). 
273060 
6 
Variable expenses. (45,510 unitsx3) 
136530 
3 
CM 
136530 
3 
Fixed expense. 
44000 

Revised Net operating income 
92530 
Revised Net operating income =$92,530
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2
What is the revised net operating income if the selling price decreases by $1.10 per unit and the number of units sold increases by 18%?
Revised selling price
=61.10
=4.9
Revised number of units
=41000+ (41000x18%)
=48,380 units
Total 
Per unit 

sales (48,380 units x 4.9). 
237062 
4.9 
Variable expenses. 
145140 
3 
CM 
91922 
1.9 
Fixed expense. 
44000 

Revised Net operating income 
47922 
Revised Net operating income =$47,922
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3. What is the revised net operating income if the selling price increases by $1.10 per unit, fixed expenses increase by $6,000, and the number of units sold decreases by 4%?
Revised selling price
=6 +1.10
=7.10
Revised number of units
=41000 (41000x4%)
=39,360 units
Total 
Per unit 

sales (39,360 units x 7.1). 
279456 
7.1 
Variable expenses. (39,360 units x 3). 
118080 
3 
CM 
161376 
4.1 
Fixed expense. (44000+6000) 
50000 

Revised Net operating income 
111376 
Revised Net operating income=111,376 _____________________________________________________________________________
4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 40 cents per unit, and the number of units sold decreases by 8%?
Revised selling price
=6 +(6*20%)
=7.2
Revised variable cost
=3+(3*40%)
=4.2
Revised number of units
=41000 (41000x8%)
=37,720 units
Total 
Per unit 

sales (37720 units x 7.2). 
271584 
7.2 
Variable expenses. (37720 units x 4.2) 
158424 
4.2 
CM 
113160 
3 
Fixed expense. 
44000 

Revised Net operating income 
69160 
Revised Net operating income=69,160 _____________________________________________________________________________
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