Exercise 5-13 (Algo) Changes in Selling Price, Sales Volume, Variable Cost per Unit, and Total Fixed Costs [LO5-1, LO5-4]
Miller Company’s contribution format income statement for the most recent month is shown below:
|
Total |
Per Unit |
|---|
Sales (30,000 units) |
$ 240,000 |
$ 8.00 |
|---|
Variable expenses |
150,000 |
5.00 |
|---|
Contribution margin |
90,000 |
$ 3.00 |
|---|
Fixed expenses |
50,000 |
|
|---|
Net operating income |
$ 40,000 |
|
|---|
Required:
(Consider each case independently):
1. What is the revised net operating income if unit sales increase by 15%?
2. What is the revised net operating income if the selling price decreases by $1.10 per unit and the number of units sold increases by 25%?
3. What is the revised net operating income if the selling price increases by $1.10 per unit, fixed expenses increase by $8,000, and the number of units sold decreases by 3%?
4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 30 cents per unit, and the number of units sold decreases by 10%?
![Exercise 5-13 (Algo) Changes in Selling Price, Sales Volume, Variable Cost per Unit, and Total Fixed<br>Costs [LO5-1, LO5-4]<br>Miller Company's contribution format income statement for the most recent month is shown below:<br>Total<br>Per Unit<br>Sales (30,000 units)<br>Variable expenses<br>$ 240,000<br>150,000<br>$ 8.00<br>5.00<br>Contribution margin<br>90,000<br>$ 3.00<br>Fixed expenses<br>50,000<br>$ 40,000<br>Net operating income<br>Required:<br>(Consider each case independently):<br>1. What is the revised net operating income if unit sales increase by 15%?<br>2. What is the revised net operating income if the selling price decreases by $1.10 per unit and the number of units sold increases by<br>25%?<br>3. What is the revised net operating income if the selling price increases by $1.10 per unit, fixed expenses increase by $8,000, and the<br>number of units sold decreases by 3%?<br>4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 30 cents per<br>unit, and the number of units sold decreases by 10%?<br>X Answer is complete but not entirely correct.<br>1. Net operating income<br>$<br>53,500<br>2. Net operating income<br>$<br>13,375<br>3. Net operating income<br>$<br>61,310<br>4. Net operating income<br>$<br>33,700<br>](https://s3.us-east-1.amazonaws.com/storage.unifolks.com/qimg-008/008_jwouzj0-psfjny1a.png)
Extracted text: Exercise 5-13 (Algo) Changes in Selling Price, Sales Volume, Variable Cost per Unit, and Total Fixed Costs [LO5-1, LO5-4] Miller Company's contribution format income statement for the most recent month is shown below: Total Per Unit Sales (30,000 units) Variable expenses $ 240,000 150,000 $ 8.00 5.00 Contribution margin 90,000 $ 3.00 Fixed expenses 50,000 $ 40,000 Net operating income Required: (Consider each case independently): 1. What is the revised net operating income if unit sales increase by 15%? 2. What is the revised net operating income if the selling price decreases by $1.10 per unit and the number of units sold increases by 25%? 3. What is the revised net operating income if the selling price increases by $1.10 per unit, fixed expenses increase by $8,000, and the number of units sold decreases by 3%? 4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 30 cents per unit, and the number of units sold decreases by 10%? X Answer is complete but not entirely correct. 1. Net operating income $ 53,500 2. Net operating income $ 13,375 3. Net operating income $ 61,310 4. Net operating income $ 33,700