use the work provided in the first three images to answer the 5 questions which...

80.2K

Verified Solution

Question

Accounting

use the work provided in the first three images to answer the 5 questions which are in the last image image
image
image
image
EXERCISE 6-13 EXERCISE 6-13 CHANGES IN SELLING PRICE, SALES VOLUME, VARIABLE COST PER UNIT, AND TOTAL FIXED COSTS Miller Company's contribution format income statement for the most recent month is shown below: 1 What is the revised net operating income if unit sales increase by 15% ? UnitsaleIncreaseinunitsaleRevisedUnitsale=$15=15%=$15.00(1+0.15)=$17.25 The revised operating income would be calculated as follows: NewunitsalesNewtotalsalesCalcialationofnewcontributioamarginCalculationofrevisednetoperatingincome=20,000(1+0.15)=23,000=23,000units$17.25=$345,000=$345,000$160,000=$105,000=$165,000$70,000=$95,000 2) What is the revised net operating income if the selling price decreases by $1.50 per unit and the number of units sold increases by 25% For case 2, there is a decrease in the selling price by $1.50 per unit and there is an increase in the number of units sold by 25%. To find revised operating Income (Net): CalculationofnewsellingpriceperunitCalculationofnewunitsalesCalculationofnewtotalsalesNewVariableExpense=$15.00$1.50=$13.50=20,000(1+0.25)=25,000=25,000$13.50=$337,500=25,000$9=$225,000 CalculaionofnewcontributionmarginCalculationofrevisednetoperatingincome=$337,500$225,000=$112,500=$112,500$70,000=$42,500 3. What is the revised net operating income if the selling price increases by $1.50 per unit, fixed expenses increase by $20,000, and the number of units sold decreases by 5% ? CalculationofnewsellingpriceperunitCalculationofnewunitsalesCalculationofNewFixedexpensesCalculationofnewtotalsalesCalculationofnewcontributionmarginCalculationofrevisednetoperatingincoene=$15,00+$1.50=$16.50=20,000(10.05)=19,000=$70,000+$20,000=$90,000=19,000$16.50=$313,500=$13,500$171,000=$142,500=$142,500($70,000+$20,000)=$52,500 4 What is the revised net operating income if the selling price per unit increases by 12%, variable expenses increase by 60 cents per unit, and the number of units sold decreases by 10% ? Calculationofnewsellingpriceperunit=$15.00(1+0.12)=$16.80 Calculation of new variable expenses per unit =$9.00+$0.60 =$9.60 Calculationofnewunitsales=20,000(10.10)=18,000 Calculationofnewtotalsales=18,000$16.80=$302,400 Calculationofnewcontributionmargin=$302,400($9.6018,000)=$129,600 Calculationofrevisednetoperatingincome=$129,600$70,000=$59,600 Calculate the company's break even point in units. Round to a whole number. QUESTION 2 What is total contribution margin at the company's break even point? Your answer should be a number. QUESTION 3 Calculate the company's current degree of operating leverage. QUESTION 4 Calculate the percentage that variable costs represent in the company's cost structure. Round your answer to the nearest whole percent. QUESTION S If sales decrease by 10%, calculate the expected percentage decrease in net income. Express your anewer as a percent

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students