Wheeler Corporation\'s most recent income statement follows TotalPer Unit Sales

Question

Wheeler Corporation's most recent income statement follows TotalPer Unit Sales (8,600 units) Variable expenses $226,180 $26.30 153,080 17.80 Contribution margin Fixed expenses 73,100 $ 8.50 56,000 Net operating income $ 17,100 Required Prepare a new contribution format income statement under each of the following conditions (consider each case independently) 1. The sales volume increases by 60 units. (Input all amounts as positive values except losses which should be indicated by a minus sign.) Con tribution Income Statement Total Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss)

Explanation / Answer

Answer

1 The sales volume increased by 60 Workings total $ Per unit $ Sales(8660) =8660*26.3 227758 26.3 Variable expenses =8660*17.8 154148 17.8 contribution 73610 fixed expenses 56000 Net operating income 17610 2 The sales volume Declines by 60 Workings total $ Per unit $ Sales(8540) =8540*26.3 224602 26.3 Variable expenses =8540*17.8 152012 17.8 contribution 72590 fixed expenses 56000 Net operating income 16590 2 The sales volume is 7600 Workings total $ Per unit $ Sales(7600) =7600*26.3 199880 26.3 Variable expenses =7600*17.8 135280 17.8 contribution 64600 fixed expenses 56000 Net operating income 8600

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