The Patisserie Hartog owns and operates 10 puff pastry outlets in and around Amsterdam. You are given the following corporate budget data for next year:

Variable costs change based on the number of puff pastries sold.
Compute the budgeted operating income for each of the following deviations from the original budget data. (Consider each case independently.)

Required

1. A 15% increase in contribution margin, holding revenues constant
2. A 15% decrease in contribution margin, holding revenues constant
3. A 10% increase in fixed costs
4. A 10% decrease in fixed costs
5. A 12% increase in units sold
6. A 12% decrease in units sold
7. An 8% increase in fixed costs and an 8% increase in units sold
8. A 6% increase in fixed costs and a 6% decrease in variable costs
9. Which of these alternatives yields the highest budgeted operating income? Explain why this is the case.

Transcribed Image Text:

Revenues Fixed costs Variable costs $12,500,000 $ 2,240,000 $ 9,750,000