Question

Whirly Corporation’s contribution format income statement for the most recent month is shown below:

	Total			Per Unit
Sales (8,400 units)	$	252,000		$	30.00
Variable expenses		159,600			19.00
Contribution margin		92,400		$	11.00
Fixed expenses		54,600
Net operating income	$	37,800

Required:

(Consider each case independently):

1. What would be the revised net operating income per month if the sales volume increases by 90 units?

2. What would be the revised net operating income per month if the sales volume decreases by 90 units?

3. What would be the revised net operating income per month if the sales volume is 7,400 units?

Answer 1