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Safari File Edit View History Bookmarks Window Help ezto.mheducation.com Student l My UNC Charlotte Course: ACCT g 2016- McGraw-Hill Education Campus 10.00 points Whirly Corporation's most recent income statement is shown below Total Per Unit Sales (10,000 units 350,000 $35.00 Variable expenses 200,000 20.00 50,000 15.00 Contribution margin Fixed expenses 35,000 15,000 Net operating income Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently) 1. The sales volume increases by 100 units. Whirly Corporation Contribution Income Statement Total Per Unit Sales Variable expenses 0 0 Contribution margin Fixed expenses S Net operating income 4) 89% U s. Mon 1:30 PM Ali Ajlan a E Chegg Study I Guided Solutions an Chap

Explanation / Answer

1. Contribution income statement ( 10100 units)

ParticLars Total.$ Per unit

Sales ( 10100 × 35) 353500. 35

Less Variable expeses (10100 ×20) 202000. 20

Contribution ( 151500/10100) 151500. 15

Less. Fixed expenses. 135000

Net operating income. 16500

2. Contribution income statements sales volume decrease by 100 units .i.e 9900 units

Sales 9900 × 35 346500. 35

Less variable cost 9900× 20. 198000. 20

Contribution.( 148500/9900) 148500. 15

Less fixed cost 135000

Net operating income. 13500

3. Contribution when there are 9000 units

Sales 9000 × 35 315000. 35

Less variable cost 9000× 20. 180000. 20

Contribution. 135000/9000. 135000. 15

Less fixed cost . 135000

Net operating income. 0

Note : Fixed cost remains the same. It does not changes as per units.

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