Question

Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (8,000 units) $ 240,000 $ 30.00 Variable expenses 152,000 19.00 Contribution margin 88,000 $ 11.00 Fixed expenses 54,200 Net operating income $ 33,800 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 40 units? 2. What would be the revised net operating income per month if the sales volume decreases by 40 units? 3. What would be the revised net operating income per month if the sales volume is 7,000 units?

Answer 1

Answer:

Results are below.

Explanation:

Giving the following information:

Unitary contribution margin= $11

Fixed costs= $54,200

First, we need to calculate the net income y sales were 8,040:

Net income= 8,040*11 - 54,200

Net income= $34,240

Now, if sales were 7,960:

Net income= 7,960*11 - 54,200

Net income= $33,360

Finally, if sales were 7,000:

Net income= 7,000*11 - 54,200

Net income= $22,800