Question: Sales ( 2 9 , 4 0 0 units ) $ 1 7 6 , 4 0 0 $ 6 . 0 0 Variable expenses

Sales (29,400 units) $ 176,400 $ 6.00
Variable expenses 105,8403.60
Contribution margin 70,560 $ 2.40
Fixed expenses 41,160
Net operating income $ 29,400
Required:
(Consider each of the four requirements independently):
1. Assume the sales volume increases by 4,998 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 $1.20 per unit and the number of units sold increases by 22%?
3. What is the revised net operating income if the selling price increases by $1.20 per unit, fixed expenses increase by $6,000, and the number of units sold decreases by 8%?
4. What is the revised net operating income if the selling price per unit increases by 10%, variable expenses increase by 40 cents per unit, and the number of units sold decreases by 10%?

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