Question

Exercise 5-1 Preparing a Contribution Format Income Statement [LO5-1 Whirly Corporation's most recent income statement is shown below: Sales (8,500 units) Variable expenses TotalPer Unit $297,500 $35.00 153,000 18.00 144,500 $17.00 Contribution margin Fixed expenses 54,800 Net operating income $ 89,700 Required Prepare a new contribution format income statement under each of the following conditions (consider each case independently): 1. The sales volume increases by 50 units. Whirly Corporation Contribution Income Statement Total Per Unit Sales expenses Contribution margin xed expenses t operating income

Answer 1

1
Sales volume = 8500+50= 8550
Whirly Corporation
Contribution Income Statement
	Total	Per unit
Sales	299250	35
Variable expenses	153900	18
Contribution margin	145350	17
Fixed expenses	54800
Net operating income	90550
2
Sales volume = 8500-50= 8450
Whirly Corporation
Contribution Income Statement
	Total	Per unit
Sales	295750	35
Variable expenses	152100	18
Contribution margin	143650	17
Fixed expenses	54800
Net operating income	88850
3
Sales volume = 7500
Whirly Corporation
Contribution Income Statement
	Total	Per unit
Sales	262500	35
Variable expenses	135000	18
Contribution margin	127500	17
Fixed expenses	54800
Net operating income	72700