CB Markets imports and sells small bear-shaped pifiatas.

“| In planning for the coming year, the company’s owner is evaluating several scenarios. For each scenario under consideration, prepare a contribution margin income statement showing eae : mane eat the anticipated operating income. Consider each scenario independently. Last year’s income statement is as follows:

Required

a. The sales price increases by 10% and sales volume decreases by 5%.

b. The sales price increases by 10% and variable cost per unit increases by 5%.

c. The sales price decreases by 10% and sales volume increases by 20%.

d. Fixed expenses increase by $20,000.

e. The sales price increases by 10%, variable cost per unit increases by 10%, fixed expenses increase by \($25,000\), and sales volume decreases by 10%.

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Total Per Unit Sales revenue Variable expenses Contribution margin Fixed expenses $600,000 $12.00 350,000 7.00 250,000 $ 5.00 175,000 Operating income $ 75,000