Question

Miller Company’s most recent contribution format income statement is shown below: Total Per Unit Sales (40,000 units) $360,000 $9.00 Variable expenses 240,000 6.00 Contribution margin 120,000 $3.00 Fixed expenses 43,000 Net operating income $ 77,000 Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently): (Do not round intermediate calculations. Round your "Per unit" answers to 2 decimal places.) 1a. The number of units sold increases by 11%. 1b. What is the change in net operating income (New NOI - Original NOI) as a result of the number of units sold increasing by 11%. (If the change is a decrease, enter a negative number. If an increase, enter a positive number.) 2a. The selling price decreases by $1.20 per unit, and the number of units sold increases by 23%. 2b. What is the change in net operating income (New NOI - Original NOI) as a result of the selling price decreasing by $1.20 per unit, and the number of units sold increasing by 23%.. (If the change is a decrease, enter a negative number. If an increase, enter a positive number.) 3a. The selling price increases by $1.20 per unit, fixed expenses increase by $7,000, and the number of units sold decreases by 5%. 3b. What is the change in net operating income (New NOI - Original NOI) as a result of the selling price increasing by $1.20 per unit, fixed expenses increasing by $7,000, and the number of units sold decreasing by 5%. (If the change is a decrease, enter a negative number. If an increase, enter a positive number.) 4a. The selling price increases by 10%, variable expenses increase by 40 cents per unit, and the number of units sold decreases by 7%. 4b. What is the change in net operating income (New NOI - Original NOI) as a result of the selling price increasing by 10%, variable expenses increasing by 40 cents per unit, and the number of units sold decreasing by 7%. (If the change is a decrease, enter a negative number. If an increase, enter a positive number.)

Answer 1