QUESTION 2 10 Marks

Stellas Company most recent contribution format Statement of Comprehensive Income is shown below:

Total Per Unit R R Sales (20 000 units) 300 000 15.00

Variable expenses 180 000 9.00

Contribution margin 120 000 6.00

Fixed expenses 70 000

Net operating income 50 000

Required: Prepare a new contribution format Statement of Comprehensive Income (income Statement) under each of the following conditions (consider each case independently):

2.1 The number of units sold increases by 15%. (2)

2.2 The selling price decreases by R1.50 per unit,

and the number of units sold increases by 25%. (2)

2.3 The selling price increases by R1.50 per unit, fixed expenses increase by R20,000, and the number of units sold decreases by 5%. (3)

2.4 The selling price increases by 12%, variable expenses increase by 60 cents per unit, and the number of units sold decreases by 10%. (3)