Question

Miller Company’s contribution format income statement for the most recent month is shown below:

	Total			Per Unit
Sales (35,000 units)	$	175,000		$	5.00
Variable expenses		70,000			2.00
Contribution margin		105,000		$	3.00
Fixed expenses		45,000
Net operating income	$	60,000

1. What is the revised net operating income if the selling price increases by $1.20 per unit, fixed expenses increase by $9,000, and the number of units sold decreases by 8%?

2. What is the revised net operating income if the selling price per unit increases by 10%, variable expenses increase by 20 cents per unit, and the number of units sold decreases by 8%?

Answer 1