50.1K

Verified Solution

Link Copied!

Miller Companys most recent contribution format income statement is shown below:

	Total	Per Unit
Sales (32,000 units)	$160,000	$5.00
Variable expenses	64,000	2.00
Contribution margin	96,000	$3.00
Fixed expenses	46,000
Net operating income	$ 50,000

Required:

Prepare a new contribution format income statement under each of the following conditions (consider each case independently): (Do not round intermediate calculations. Round your "Per unit" answers to 2 decimal places.)

The number of units sold increases by 18%. Miller Company Contribution Income Statement Total Per Unit Sales Variable expenses Contribution margin 0 $0.00 Fixed expenses Net operating income $0 2. The selling price decreases by $1.40 per unit, and the number of units sold increases by 17%. Miller Company Contribution Income Statement Total Per Unit Sales Variable expenses Contribution margin 0 $0.00 Fixed expenses Net operating income $0 3. The selling price increases by $1.40 per unit, fixed expenses increase by $5,000, and the number of units sold decreases by 6%. Miller Company Contribution Income Statement Total Per Unit Sales Variable expenses Contribution margin 0 $0.00 Fixed expenses Net operating income $0 4. The selling price increases by 20%, variable expenses increase by 20 cents per unit, and the number of units sold decreases by 10%. Miller Company Contribution Income Statement Total Per Unit Sales Variable expenses Contribution margin 0 0.00 Fixed expenses Net operating income $0

Answer & Explanation Solved by verified expert

See Answer