Miller Company’s contribution format income statement for the most recent month is shown below:

Sales (39,000 units) $ 273,000 $ 7.00

Variable expenses $ 156,000. $ 4.00

Contribution margin $117,000 $ 3.00

Fixed expenses 50,000

Net operating income $ 67,000

Required: (Consider each case independently): 

1. What is the revised net operating income if unit sales increase by 10%?

 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 22%?

 3. What is the revised net operating income if the selling price increases by $1.30 per unit, fixed expenses increase by $8,000, and the number of units sold decreases by 4%?

 4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 30 cents per unit, and the number of units sold decreases by 6%?

Answer rating: 100% (QA)

1 To calculate the revised net operating income if unit sales increase by 10 we first need to calculate the new sales revenue New sales revenue 39000 units x 700 per unit x 110 10 increase 305910 Next ... View the full answer