Miller Company’s contribution format income statement for themost recent month is shown below:TotalPer...Miller Company’s...

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Accounting

Miller Company’s contribution format income statement for themost recent month is shown below:
Total Per Unit
Sales (41,000units) $ 246,000 $ 6.00
Variable expenses 123,000 3.00
Contribution margin 123,000 $ 3.00
Fixed expenses 48,000
Net operating income $ 75,000
Required:
(Consider each case independently):
1. What is the revised net operating income if unit salesincrease by 16%?
2. What is the revised net operating income if the selling pricedecreases by $1.50 per unit and the number of units sold increasesby 15%?
3. What is the revised net operating income if the selling priceincreases by $1.50 per unit, fixed expenses increase by $8,000, andthe number of units sold decreases by 4%?
4. What is the revised net operating income if the selling priceper unit increases by 10%, variable expenses increase by 30 centsper unit, and the number of units sold decreases by 6%?

Answer & Explanation Solved by verified expert

3.9 Ratings (626 Votes)

Income statement
Particulars	Per unit	Total
Units		47,560

Sales revenue	6.00	285,360

Minus:
Variable cost	3.00	142,680

Contribution margin	3.00	142,680

Minus:
Fixed cost		48,000

Net operating income		94,680

Income statement
Particulars	Per unit	Total
Units		47,150

Sales revenue	4.50	212,175

Minus:
Variable cost	3.00	141,450

Contribution margin	1.50	70,725

Minus:
Fixed cost		48,000

Net operating income		22,725

Income statement
Particulars	Per unit	Total
Units		39,360

Sales revenue	7.50	295,200

Minus:
Variable cost	3.00	118,080

Contribution margin	4.50	177,120

Minus:
Fixed cost		56,000

Net operating income		121,120

Income statement
Particulars	Per unit	Total
Units		38,540

Sales revenue	6.60	254,364

Minus:
Variable cost	3.30	127,182

Contribution margin	3.30	127,182

Minus:
Fixed cost		48,000

Net operating income		79,182

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In: AccountingMiller Company’s contribution format income statement for themost recent month is shown below:TotalPer...Miller Company’s contribution format income statement for themost recent month is shown below:TotalPer UnitSales (41,000units)$246,000$6.00Variable expenses123,0003.00Contribution margin123,000$3.00Fixed expenses48,000Net operating income$75,000Required:(Consider each case independently):1. What is the revised net operating income if unit salesincrease by 16%?2. What is the revised net operating income if the selling pricedecreases by $1.50 per unit and the number of units sold increasesby 15%?3. What is the revised net operating income if the selling priceincreases by $1.50 per unit, fixed expenses increase by $8,000, andthe number of units sold decreases by 4%?4. What is the revised net operating income if the selling priceper unit increases by 10%, variable expenses increase by 30 centsper unit, and the number of units sold decreases by 6%?

	Total		Per Unit
Sales (41,000units)	$	246,000	$	6.00
Variable expenses		123,000		3.00
Contribution margin		123,000	$	3.00
Fixed expenses		48,000
Net operating income	$	75,000