Chapter 6, Problem 13E

Change in selling price, Sales Volume, Variable Cost per Unit, and Total Fixed Costs LO6-1, LO6-4

Miller Company’s contribution format income statement for the most recent month is shown below:

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 $1.50 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 selling price per unit increases by 12%, variable expenses increase by 60 cents per unit,and the number of units sold decreases by 10%?