Question

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

	Total			Per Unit
Sales (7,800 units)	$	241,800		$	31.00
Variable expenses		156,000			20.00
Contribution margin		85,800		$	11.00
Fixed expenses		54,200
Net operating income	$	31,600

Required:

(Consider each case independently):

1. What would be the revised net operating income per month if the sales volume increases by 80 units?

2. What would be the revised net operating income per month if the sales volume decreases by 80 units?

3. What would be the revised net operating income per month if the sales volume is 6,800 units?

Answer 1