1 Exercise 6-1 The Effect of Changes in Activity on Net Operating Income (L06-1) 36 olnts Whirly Corporation's contribution format income statement for the most recent month is shown below: eBook Sales (7,300 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 219,000 138,700 80,300 55,800 $ 24,500 Per Unit $ 30.00 19.00 $ 11.00 Hint Print References Required: (Consider each case independentlyy: 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 6,300 units? 1. Revised net operating income 2 Revised net operating incomo 3. Revised not operating Income 2 Exercise 6-4 Computing and using the CM Ratio (LO6-3) 136 points Last month when Holiday Creations, Inc., sold 37000 units, total sales were $314,000, total variable expenses were $232,360, and fixed expenses were $38,000. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase total sales by $1.2007 (Do not round Intermediate calculations.) Book Hint Print 1. Contribution margin ratio 2 Estimated change in net operating income 3 Part 1 of 2 Required information Exercise 6-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (L06-4) [The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: 136 points Selling price Variable expenses Contribution margin Per Unit $120 78 $ 42 Percent of Sales 1000 65 35 Book Fixed expenses are $84,000 per month and the company is selling 2,600 units per month Print Exercise 6-5 Part 1 References Required: 1-a. How much will net operating income increase (decrease) per month of the monthly advertising budget increases by $8,900 and monthly sales increase by $18,000? 1-6. Should the advertising budget be increased? Complete this question by entering your answers in the tabs below. Req1A Reg 13 How much will net operating Income increase (decrease) per month the monthly advertising budget increases by $8.900 and monthly sales increase by $18,0007 (Round any unit calculations up to the nearest whole unit) Nel pering com Req18 > 4 0 Part 2 of 2 Required Information Exercise 6-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (LO6-4) [The following information applies to the questions displayed below) Data for Hermann Corporation are shown below: 136 points Selling price Variable expenses Contribution margin Per Unit $120 70 $ 42 Percent of Sales 1001 65 358 Book Hint Fixed expenses are $84,000 per month and the company is selling 2,600 units per month Pri Exercise 6-5 Part 2 References 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher quality components that increase the variable expense by $5 per unit and increase unit sales by 20% 2-b. Should the higher quality components be used? Complete this question by entering your answers in the tabs below. Pe 2A Reg 28 Refer to the original data. How much wil net operating income increase (decrease) per month of the company uses higher quality components that increase the variable expense by $5 per unit and increase unit sales by 20% Na operating income by ROBA Reg 28 >
