6. ABC's most recent contribution format income statement is shown below: Total Per Unit $10.00 $100,000...

Transcribed Image Text:

6. ABC's most recent contribution format income statement is shown below: Total Per Unit $10.00 $100,000 70,000 Sales (10,000 units) Variable expenses Contribution margin Fixed expenses 7.00 30,000 $ 3.00 20,000 Net operating income $10,000 Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently): 1. The number of units sold increases by 20% 2. The selling price decreases by $1 per unit, and the number of units sold increases by 10% 3. The selling price increases by $2 per unit, fixed expenses increase by $10,000, and the number of units sold decreases by 10%. 4. Variable expenses increase by $1 per unit, the selling price increases by 30%, and the number of units sold decreases by 30%. 6. ABC's most recent contribution format income statement is shown below: Total Per Unit $10.00 $100,000 70,000 Sales (10,000 units) Variable expenses Contribution margin Fixed expenses 7.00 30,000 $ 3.00 20,000 Net operating income $10,000 Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently): 1. The number of units sold increases by 20% 2. The selling price decreases by $1 per unit, and the number of units sold increases by 10% 3. The selling price increases by $2 per unit, fixed expenses increase by $10,000, and the number of units sold decreases by 10%. 4. Variable expenses increase by $1 per unit, the selling price increases by 30%, and the number of units sold decreases by 30%.

Answer rating: 100% (QA)

Total Per Unit Units Sales 100000 10 10000 Less Variable Cost 70000 7 10000 Contribut... View the full answer