Question

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

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

Total Per Unit
Sales (8,000 units) $ 272,000 $ 34.00
Variable expenses 152,000 19.00
Contribution margin 120,000 $ 15.00
Fixed expenses 54,000
Net operating income $ 66,000

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 7,000 units?

Homework Answers

Answer #1
1) Contribution income statement
total per unit
Sales 274720 34
Variable expense 153520 19
Contribution margin 121200 15
Fixed expense 54,000
Net operating income 67,200
(sales volume = 8,000+80= 8080 )
2) Contribution income statement
total per unit
Sales (7,620 units) 269280 34
Variable expense 150480 19
Contribution margin 118800 15
Fixed expense 54,000
Net operating income 64,800
(sales volume = 8,000-80 = 7920 )
3) Contribution income statement
total per unit
Sales 238000 34
Variable expense 133000 19
Contribution margin 105000 15
Fixed expense 54,000
Net operating income 51,000
Sales volume = 7000 units
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