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ACC-650 TOPIC 2 ASSIGNMENT

Question 13

Carla Vista Markets imports and sells small bear-shaped piatas. In planning for the coming year, the company's owner is evaluating several scenarios. For each scenario under consideration, prepare a contribution margin income statement showing the anticipated operating income. Consider each scenario is applied independently to the original data. Last year's income statement is as follows:

		Total		Per Unit
Sales revenue
Variable expenses
Contribution margin
Fixed expenses
Operating income

(a)

The sales price increases by10% and sales volume decreases by6%. (Round per unit answers to 2 decimal places, e.g. 0.38.)

Carla Vista Markets Income Statement
		Total		Per Unit
Sales
Variable expenses
Contribution margin
Fixed expenses
Operating income

(b)

The sales price increases by10% and variable cost per unit increases by6%.(Round per unit answers to 2 decimal places, e.g. 0.38.)

Carla Vista Markets Income Statement
		Total		Per Unit
Sales
Variable expenses
Contribution margin
Fixed expenses
Operating income

(c)

The sales price decreases by5% and sales volume increases by15%.(Round per unit answers to 2 decimal places, e.g. 0.38.)

Carla Vista Markets Income Statement
		Total		Per Unit
Sales
Variable expenses
Contribution margin
Fixed expenses
Operating income

(d)

Fixed expenses increase by $40,000.(Round per unit answers to 2 decimal places, e.g. 0.38.)

Carla Vista Markets Income Statement
		Total		Per Unit
Sales
Variable expenses
Contribution margin
Fixed expenses
Operating income

(e)

The sales price increases by12%, variable cost per unit increases by15%, fixed expenses increase by $30,000, and sales volume decreases by15%.(Round per unit answers to 2 decimal places, e.g. 0.38.)

Carla Vista Markets Income Statement
		Total		Per Unit
Sales
Variable expenses
Contribution margin
Fixed expenses
Operating income