Question

Exercise 6-13 Changes in Selling Price, Sales Volume, Variable Cost per Unit, and Total Fixed Costs [LO6-1, LO6-4] Miller Company's contribution format income statement for the most recent month is shown below: Sales (31,000 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $186,000 93,000 93,000 44,000 $ 49,000 Per Unit $6.00 3.00 $3.00 Required: (Consider each case independently): 1. What is the revised net operating income if unit sales increase by 11%? 2. What is the revised net operating income if the selling price decreases by $1.30 per unit and the number of units sold increases by 23%? 3. What is the revised net operating income if the selling price increases by $1.30 per unit, fixed expenses increase by $6,000, 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 20 cents per unit, and the number of units sold decreases by 12%? 1. Net operating income 2. Net operating income 3. Net operating income 4. Net operating income

Answer 1

1
	Total	Per unit
Sales (34410 units)	206460	6.00
Variable expenses	103230	3.00
Contribution margin	103230	3.00
Fixed expenses	44000
Net Operating income	59230
2
	Total	Per unit
Sales (38130 units)	179211	4.70
Variable expenses	114390	3.00
Contribution margin	64821	1.70
Fixed expenses	44000
Net Operating income	20821
3
	Total	Per unit
Sales (30070 units)	219511	7.30
Variable expenses	90210	3.00
Contribution margin	129301	4.30
Fixed expenses	50000
Net Operating income	79301
4
	Total	Per unit
Sales (27280 units)	196416	7.20
Variable expenses	87296	3.20
Contribution margin	109120	4.00
Fixed expenses	44000
Net Operating income	65120