Question

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

	Total			Per Unit
Sales (8,500 units)	$	263,500		$	31.00
Variable expenses		161,500			19.00
Contribution margin		102,000		$	12.00
Fixed expenses		55,800
Net operating income	$	46,200

Required:

(Consider each case independently):

1. What would be the revised net operating income per month if the sales volume increases by 40 units?

2. What would be the revised net operating income per month if the sales volume decreases by 40 units?

3. What would be the revised net operating income per month if the sales volume is 7,500 units?

Answer 1