Exercise 5-1 The Effect of Changes in Activity on Net Operating Income [LO5-1 Wh

Question

Exercise 5-1 The Effect of Changes in Activity on Net Operating Income [LO5-1 Whirly Corporation's contribution format income statement for the most recent month is shown below Sales (8,400 units) $277,200 $33.00 Variable expenses 168,000 20.00 Contribution margin 109,200 $%13.00 Fixed expenses Net operating income 53, 500 55,700 Required: Consider each case independently) 1. What would be the revised net operating income per month if the sales volume increases by 100 units? 2. What would be the revised net operating income per month if the sales volume decreases by 100 units? 3. What would be the revised net operating income per month if the sales volume is 7,400 units? 1. Revised net operating income 2 Revised net operating income 3 Revised net operating income

Explanation / Answer

Units 8400 Total Per Unit Sales 277200 33.00 Less: Variable Cost 168000 20.00 Contribution Margin 109200 13.00 Less: Fixed Cost 55700 Net Operating Income 53500 1 Revised Sales Units 8500 Total Per Unit Sales 280500 33.00 Less: Variable Cost 170000 20.00 Contribution Margin 110500 13.00 Less: Fixed Cost 55700 Net Operating Income 54800 2 Revised Sales Units 8300 Total Per Unit Sales 273900 33.00 Less: Variable Cost 166000 20.00 Contribution Margin 107900 13.00 Less: Fixed Cost 55700 Net Operating Income 52200 3 Revised Sales Units 7400 Total Per Unit Sales 244200 33.00 Less: Variable Cost 148000 20.00 Contribution Margin 96200 13.00 Less: Fixed Cost 55700 Net Operating Income 40500

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

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