Miller Company's contribution format income statement for the most recent month is shown below: Sales (20,000 units) Variable expenses Contribution margin Fixed expenses Total
Miller Company's contribution format income statement for the most recent month is shown below: Sales (20,000 units) Variable expenses Contribution margin Fixed expenses Total $ 300,000 180,000 120,000 Per Unit $ 15.00 9.00 $ 6.00 70,000 $ 50,000 Net operating income Required: (Consider each of the four requirements independently): 1. Assume the sales volume increases by 3,000 units: a. What is the revised net operating income? b. What is the percent increase in unit sales? c. Using the most recent month's 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 $1.50 per unit and the number of units sold increases by 25%? 3. What is the revised net operating income if the selling price increases by $1.50 per unit, fixed expenses increase by $20,000, 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 12%, variable expenses increase by 60 cents per unit, and the number of units sold decreases by 10%? 1a. Net operating income $ 68,000 1b. Percent increase in unit sales 15% 1c. Percent increase in net operating income 36 % 2. Net operating income $ 42,500 3. Net operating income 4. Net operating income
Step by Step Solution
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Step: 1
Lets start solving each part of the question one by one First we will derive some necessary parameters 1 Contribution Margin per Unit Calculation Sales per Unit 15 Variable Expenses per Unit 9 Contrib...See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
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