Question

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

	Total			Per Unit
Sales (34,000 units)	$	306,000		$	9.00
Variable expenses		204,000			6.00
Contribution margin		102,000		$	3.00
Fixed expenses		48,000
Net operating income	$	54,000

Required:

(Consider each case independently):

1. What is the revised net operating income if unit sales increase by 18%?

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 $9,000, 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 30 cents per unit, and the number of units sold decreases by 14%?

1.Net operating income $72,3602.

2. Net operating income $28,2283.

3. Net operating income _________

4.Net operating income __________

Answer 1