What is the revised net operating income if unit sales increase by 15%? 2. What is the revised net operating income if the selling price decreases by $1.10 per unit and the number of units sold increases by 25%?
Exercise 5-13 (Algo) Changes in Selling Price, Sales Volume, Variable Cost per Unit, and Total Fixed Costs [LO5-1, LO5-4]
Miller Company’s contribution format income statement for the most recent month is shown below:
| Total | Per Unit | |
|---|---|---|
| Sales (30,000 units) | $ 240,000 | $ 8.00 |
| Variable expenses | 150,000 | 5.00 |
| Contribution margin | 90,000 | $ 3.00 |
| Fixed expenses | 50,000 | |
| Net operating income | $ 40,000 |
Required:
(Consider each case independently):
1. What is the revised net operating income if unit sales increase by 15%?
2. What is the revised net operating income if the selling price decreases by $1.10 per unit and the number of units sold increases by 25%?
3. What is the revised net operating income if the selling price increases by $1.10 per unit, fixed expenses increase by $8,000, and the number of units sold decreases by 3%?
4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 30 cents per unit, and the number of units sold decreases by 10%?
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
