Question

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

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

 Total Per Unit Sales (40,000 units) \$ 280,000 \$ 7.00 Variable expenses 160,000 4.00 Contribution margin 120,000 \$ 3.00 Fixed expenses 43,000 Net operating income \$ 77,000

Required:

(Consider each case independently):

1. What is the revised net operating income if unit sales increase by 12%?

2. What is the revised net operating income if the selling price decreases by \$1.20 per unit and the number of units sold increases by 21%?

3. What is the revised net operating income if the selling price increases by \$1.20 per unit, fixed expenses increase by \$5,000, and the number of units sold decreases by 7%?

4. What is the revised net operating income if the selling price per unit increases by 10%, variable expenses increase by 40 cents per unit, and the number of units sold decreases by 14%?

 1 Total Per unit Sales (44,800 units) 313600 7 Variable expenses 179200 4 Contribution margin 134400 3 Fixed expenses 43000 Revised net operating income 91400 2 Total Per unit Sales (48,400 units) 280720 5.8 Variable expenses 193600 4 Contribution margin 87120 1.8 Fixed expenses 43000 Revised net operating income 44120 3 Total Per unit Sales (37,200 units) 305040 8.2 Variable expenses 148800 4 Contribution margin 156240 4.2 Fixed expenses 48000 Revised net operating income 108240 4 Total Per unit Sales (34,400 units) 264880 7.7 Variable expenses 151360 4.4 Contribution margin 113520 3.3 Fixed expenses 43000 Revised net operating income 70520

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