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

Question

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 Contribution margin 150,000 $ 15.00 Fixed expenses 135,000 Net operating income $ 15,000 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. 2. The sales volume decreases by 100 units. 3. The sales volume is 9,000 units.

Explanation / Answer

Statement showing computations Particulars Amount Per unit Sales                        350,000.00                                   35.00 Variable expenses                        200,000.00                                   20.00 Contribution margin = sales- VC                        150,000.00                                   15.00 Fixed Expenses                        135,000.00 Net Operating Income                           15,000.00 Statement showing computations Particulars Case 1 - 10,100 Units Case 2 - 9,900 Units Case 3 - 9,000 Units Sales                        353,500.00                        346,500.00                        315,000.00 Variable expenses                        202,000.00                        198,000.00                        180,000.00 Contribution margin = sales- VC                        151,500.00                        148,500.00                        135,000.00 Fixed Expenses                        135,000.00                        135,000.00                        135,000.00 Net Operating Income                           16,500.00                           13,500.00                                          -

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.