Question

Whirly Corporation’s contribution format income statement for the most recent month is shown below:

	Total			Per Unit
Sales (8,600 units)	$	266,600		$	31.00
Variable expenses		163,400			19.00
Contribution margin		103,200		$	12.00
Fixed expenses		54,800
Net operating income	$	48,400

Required:

(Consider each case independently):

1. What would be the revised net operating income per month if the sales volume increases by 100 units?

2. What would be the revised net operating income per month if the sales volume decreases by 100 units?

3. What would be the revised net operating income per month if the sales volume is 7,600 units?

Answer 1

Sol. Cl) Calculation of revised net operating in come per menth if the Sales volume increases by loo Units — Particulars Sale's (8.700 Vuit's x $31) Less - Variable Expenses ( 8,700 Vuit's x $19) Contribution Margin Less :- fixed Expenses Net Operating Income Amount $ 269,700 $(165,300) $ 104,400 $ (54,800) $ 49,600

Income per Amount Solo (2) Calculation of revised net operatin ing menth if the sales volume decreases by loo Units Particulars Sale's (8,500 Vuit's x $31) $ 263,500 lesson Variable Expenses (8,500 Vnit's x $19) $(161,500) Contribution Margin $ 102,000 Jess:- Fixed Expenses $ (54,800) Net Operating Income $ 47,200

Sol.63 ) Calculation of revised net operating Income per month if the sales volume is 7,600 Vuit's — Particulars Sale's (7600 unit's * $31) less - Variable Expenses (7,600 Vuit's x $19) Contribution Margin less - fixed Expenses I Net operating Income Amount $ 235,600 $(144.400) $ 91,200 $ (54,800 $ 36,400