Question

Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (8,300 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $273,900 157,700 116,200 54,700 $ 61,500 Per Unit $33.00 19.00 $14.00 Required: (Consider each case independently): : 1. What would be the revised net operating income per month if the sales volume increases by 50 units? 2. What would be the revised net operating income per month if the sales volume decreases by 50 units? 3. What would be the revised net operating income per month if the sales volume is 7,300 units? 2. Revised net operating income Revised net operating income Revised net operating income 3.

Answer 1

1) Income statement

	Total	Per unit
Sales (8350*33)	275550	33
Variable cost	158650	19
Contribution margin	116900	14
Fixed cost	54700
Net operating income	62200

2) Income statement

	Total	Per unit
Sales (8250*33)	272250	33
Variable cost	156750	19
Contribution margin	115500	14
Fixed cost	54700
Net operating income	60800

3) Income statement

	Total	Per unit
Sales (7300*33)	240900	33
Variable cost	138700	19
Contribution margin	102200	14
Fixed cost	54700
Net operating income	47500