Whirly Corporation’s most recent income statement is shown below: Prepare a new

Question

Whirly Corporation’s most recent income statement is shown below:

Prepare a new contribution format income statement under each of the following conditions (consider each case independently):

1. The sales volume increases by 70 units.

Contribution income Statement

2. The sales volume decreases by 70 units.

Contribution Income Statement

3.The sales volume is 8,000 units.

Contribution Income Statement

     

Total Per Unit Sales (9,000 units) $ 279,000 $ 31.00 Variable expenses 162,000 18.00 Contribution margin 117,000 $ 13.00 Fixed expenses 55,100 Net operating income $ 61,900

Explanation / Answer

The per unit variable cost and total fixed costs will remain same.

Contribution Format Income Statement 9070 8930 8000 units units units Sales (@ $31 per unit) 281170 276830 248000 Variable expenses (@ $18 per unit) 163260 160740 144000 Contribution margin 117910 116090 104000 Fixed expenses 55100 55100 55100 Net operating income 62810 60990 48900

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