Chapter 5, Problem 13E

EXERCISE 5-13 Changes in Selling Price, Sales Volume, Variable Cost per Unit, and Total Fixed Costs LOS-1, LO5-4
Miller Company’s contribution format income statement for the most recent month is shown below:

Total Per Unit

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 setting price decreases by $1.50 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 $1.50 per unit, fixed expenses increase by $20,000, and the number of units sold decreases by 5%?
4. What is the revised net operating income if the setting price per unit increases by 12%, variable expenses increase by 60 cents per unit, and the number of units sold decreases by 10%?