Exercise 5-1 Preparing a Contribution Format Income Statement [LO5-1]

Whirly Corporation's most recent income statement is shown below:

Total Per Unit

Sales (8,100 units) $259,200 $32.00

Variable expenses 162,000 20.00

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Contribution margin 97,200 $12.00

Fixed expenses 55,200 --------------

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Net operating income $42,000

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Required:

Make a new contribution format income statement under each of the following conditions (consider each case independently):

1.

The sales volume increases by 40 units.

2.

The sales volume decreases by 40 units.

3.

The sales volume is 7,100 units.