Total Per Unit Sales (10,000 units). Variable expenses Contribution margin ... Fixed expenses.. $350,000 $ 35.00 200,000 20.00 150,000 $ 15.00 Net operating income 135,000 $ 15,000

Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter14: Decentralized Operations
Section: Chapter Questions
Problem 3SEQ: Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of...
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The Effect of Changes in Activity on Net Operating Income

Whirly Corporation’s contribution format income statement for the most recent month is shown below:

Required:

(Consider each case independently):

1. What would be the revised net operating income per month if the sales volume increases by 100 units?

2. What would be the revised net operating income per month if the sales volume decreases by 100 units?

3. What would be the revised net operating income per month if the sales volume is 9,000 units?

Total
Per Unit
Sales (10,000 units).
Variable expenses
Contribution margin ...
Fixed expenses..
$350,000 $ 35.00
200,000
20.00
150,000 $ 15.00
Net operating income
135,000
$ 15,000
Transcribed Image Text:Total Per Unit Sales (10,000 units). Variable expenses Contribution margin ... Fixed expenses.. $350,000 $ 35.00 200,000 20.00 150,000 $ 15.00 Net operating income 135,000 $ 15,000
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