Aladin Company Manufactures small battery that is used in clocks, toys and some other electronic devices. The last month’s income statement of Aladin is given below: Total Per Unit Sales (30,000 batteries) $300,000 $10 Less variable expenses $180,000 $6 Contribution Margin $120,000 $4 Fixed expenses $100,000 Net operating income $20,000 Required: Prepare Aladin's new income statement under each of the following conditions: 1.The sales volume increase by 15%. 2. The selling price decreases by 20% per unit, and the sales volume increase by 30%. 3. The selling price increases by 50% per unit, fixed expenses increase by $20,000 and the sales volume decreases by 5%. 4. Variable expenses increases by 20% per unit, the selling price increase by 12%, and the sales volume decrease by 10%.
Aladin Company Manufactures small battery that is used in clocks, toys and some other electronic devices. The last month’s income statement of Aladin is given below: Total Per Unit Sales (30,000 batteries) $300,000 $10 Less variable expenses $180,000 $6 Contribution Margin $120,000 $4 Fixed expenses $100,000 Net operating income $20,000 Required: Prepare Aladin's new income statement under each of the following conditions: 1.The sales volume increase by 15%. 2. The selling price decreases by 20% per unit, and the sales volume increase by 30%. 3. The selling price increases by 50% per unit, fixed expenses increase by $20,000 and the sales volume decreases by 5%. 4. Variable expenses increases by 20% per unit, the selling price increase by 12%, and the sales volume decrease by 10%.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 35P
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Question
Aladin Company Manufactures small battery that is used in clocks, toys and some other electronic devices. The last month’s income statement of Aladin is given below:
|
|
Total |
Per Unit |
|
Sales (30,000 batteries) |
$300,000 |
$10 |
|
Less variable expenses |
$180,000 |
$6 |
|
Contribution Margin |
$120,000 |
$4 |
|
Fixed expenses |
$100,000 |
|
|
Net operating income |
$20,000 |
|
Required:
Prepare Aladin's new income statement under each of the following conditions:
1.The sales volume increase by 15%.
2. The selling price decreases by 20% per unit, and the sales volume increase by 30%.
3. The selling price increases by 50% per unit, fixed expenses increase by $20,000 and the sales volume decreases by 5%.
4. Variable expenses increases by 20% per unit, the selling price increase by 12%, and the sales volume decrease by 10%.
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