Exercise 5-1 The Effect of Changes in Activity on Net Operating Income [LO5-1]

Whirly Corporations contribution format income statement for the most recent month is shown below:

	Total			Per Unit
Sales (8,600 units)	$	258,000		$	30.00
Variable expenses		163,400			19.00
Contribution margin		94,600		$	11.00
Fixed expenses		54,400
Net operating income	$	40,200

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?