Miller Companys contribution format income statement for the most recent month is shown below:

Total Per Unit

Sales $(28,800$ units$)$ $ $259,200$ $ $9\mathrm{.}00$

Variable expenses $155,5205\mathrm{.}40$

Contribution margin $103,680$ $ $3\mathrm{.}60$

Fixed expenses $60,480$

Net operating income $ $43,200$

Required:

$($Consider each of the four requirements independently$)$:

$1).$ Assume the sales volume increases by $4,320$ units:

a$.$ What is the revised net operating income?

b$.$ What is the percent increase in unit sales?

c$.$ Using the most recent months degree of operating leverage, what is the percent increase in net operating income?

$2).$ What is the revised net operating income if the selling price decreases by $$1\mathrm{.}50$ per unit and the number of units sold increases by $18\%?$

$3).$ What is the revised net operating income if the selling price increases by $$1\mathrm{.}50$ per unit, fixed expenses increase by $$6,000,$ and the number of units sold decreases by $5\%?$

$4).$ What is the revised net operating income if the selling price per unit increases by $20\%,$ variable expenses increase by $20$ cents per unit, and the number of units sold decreases by $11\%?$

Answer rating: 100% (QA)

Answer 1 Sales Volume Increase a Revised Net Operating Income textRevised Net Operating Income textU... View the full answer