Question

Sales (45,000 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $360,000 225,000 135,000 40,000 $ 95,000 Per Unit $8.00 5.00 $ 3.00 Required: (Consider each case independently): 1. What is the revised net operating income if unit sales increase by 13%? 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 15%? 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 7%? 4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 10 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 Answer ՃՈ օպe Style]: عول ہوناواهن اوول (ہ)ne statements _ help the +1999014Lmhylt of Com2404___1999419) Kesultinchides the profft or less from the operations_botit, lossis.coluylated by delyching seven yer_to the costs of operation costs includes Vaulable and fixed cesti Variable Cost's changes as level of activity changes. Fixed costi emin_some 95 production level of qativity i profil /1055_: Revenue - Toby) Gosts لا ولا sseqeمنعاود نوکeدكم وحطوعيه_Net Income_Statement _Sales. [645000 + 13% of 45000 ynits) x $8)___ - Variable Cost_[C45000 + 13% of 4spoo units) x $5) - Contribution margin_ fixed costs Net Operating Income 1 406800 (254250) 157550 I (40000) 112550 2 Net Operating__Income jf_selling price decrease by__$ 1.10 per unit Loc. of units increase by_15%) Now New Selling Price : Units sold = - $8-$1.10 45000 units t 51750 units : $ 6.90 15% of 45000 unit

357075 (258750) Income statement L.Sqles_(_513.50 units X $6.90). Vaxlable Gats (519.50 units.X. 5) Contributpo. Mangla_ - Fixed costs _Net Operating margin 98325 (40000) 58325 / Net Operations Income it Selling Price incremes by $ 1.10 per unit fixed Expense_increases by $ pooo Number of units decregies ly 7% New selling Price $8 t $1.10 = 49.10 per unit New fixed coils & (40000 + 8000)= $48000 New No or vides a 45000 ynjts - 7% of 45000 units : 41850 units Income Slakemont sgles 141850 units X $ 9.10) 380835 -: Vaulable costs (45850_units X $5) (209250) Coolejbytjon_Magia 171585 - Fixed Gosts 98000) Nel Operating_Iaseme 123 SSS Net Operations_Igume if E selling per unit in weques by 20% Vquiable Expeque_inseyses by lo senté poet Holt Nymber of units soll decenies by 12% - New selling price fee unie - New Vaulatie Expense per unik -> New Number of units solt - $ 8+ 20% of $8 - $ 9.6.paugi $5+ 0.10 :_$_5.10_pey unit 41000 yaits - 1294 of 45000 units 39600 units.

Income statment Sales (39600 49103 x $ 9.60)_ - Variable costó (39600 units X $ 5.10) . con brilytjon Margin 380160 (201960) 178200 (40000) 138.200 - Fixed Costs Net Operation Income The answers que situating Amt: ($ 112550 Pittalaus Net Operating Income net Oplanting Income Net operating Income Net operating Iname 58325 123585 138200