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12345 [234]
3 years ago
10

Exercise 5-1 The Effect of Changes in Activity on Net Operating Income [LO5-1] Whirly Corporation’s contribution format income s

tatement for the most recent month is shown below: Total Per Unit Sales (7,200 units) $ 237,600 $ 33.00 Variable expenses 136,800 19.00 Contribution margin 100,800 $ 14.00 Fixed expenses 54,900 Net operating income $ 45,900 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 6,200 units?
Business
1 answer:
geniusboy [140]3 years ago
6 0

Answer:

See the explanation.

Explanation:

Requirement 1

New sales volume after increasing 40 units = (7,200 + 40) = 7,240 units. The revised net operating income is calculated as follows

                          Whirly Corporation’s

              Contribution format income statement

              For the year ended December 31 20YY

Sales Revenue (7,240 × 33) = $ 237,600 (Note - 1)

Less: Variable expense (7,240 × 19) = 136,800 (Note - 2)

Contribution Margin = $100,800

Less: Fixed Expense  $54,900

Net Operating Income $45,900

Note 1: Sale price per unit $237,600 ÷ 7,200 = $35

Note 2: Variable expense per unit $136,800 ÷ 7,200 = $20

Requirement 2

From requirement 1 we get,

Sale price per unit = $33

Variable expense per unit = $19

New sales volume after decreasing 40 units = (7,200 - 40) = 7,160 units. The revised net operating income is calculated as follows

                           Whirly Corporation’s

              Contribution format income statement

              For the year ended December 31 20YY

Sales Revenue (7,160 × 33) = $236,280

Less: Variable expense (7,160 × 19) = $136,040

Contribution Margin = $100,240

Less: Fixed Expense  $54,900

Net Operating Income $45,340

Requirement 3

From requirement 1 we get

Sale price per unit = $33

Variable expense per unit = $19

If the sales volume is 6,200 units, the revised net operating income is calculated as follows

                        Whirly Corporation’s

              Contribution format income statement

              For the year ended December 31 20YY

Sales Revenue (6,200 × 33) = $204,600

Less: Variable expense (6,200 × 19) = $117,800

Contribution Margin = $86,800

Less: Fixed Expense  $54,900

Net Operating Income           $31,900

If the company sells 6,200 units, the company can still make a profit.

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3 years ago
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kirill [66]

Answer: B. increase to $209,000;increase to $209,000

Explanation:

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A person's wealth is calculated by deducting their liabilities from assets. In this case Jordan's wealth is;

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3 years ago
Automatic stabilizers refer to:
Aliun [14]

Answer:

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Explanation:

The two most common automatic stabilizers are: income taxes and unemployment benefits.

When the economy is strong, people make more money, and income tax revenue automatically increases.

On the contrary, when the economy is weak, or in recession, people earn less, and more of them are unemployed. Unemployment benefits therefore increase accordingly.

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3 years ago
The following accounts were taken from the Adjusted Trial Balance columns of the end-of-period spreadsheet: Accumulated Deprecia
ludmilkaskok [199]

Answer:

all the given figures are wrong but i explained the correct procedure.

Explanation:

INCOME STATEMENT

Fees earned                            17400

Expenses:  

Depreciation expense      1300  

Insurance expense      400  

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Net Income                               11900

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3 years ago
On July 1, 2021, Tremen Corporation acquired 40% of the shares of Delany Company. Tremen paid $3,070,000 for the investment, and
forsale [732]

Answer:

Tremen's "Investment in Delany Company" account would have abalance of $3,214,000 at the end year of December 31 ,2021.

Explanation:

Dividend paid for the whole year = $170,000*4 = 680,000

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8 0
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