12 Exercise 5-1 Preparing a Contribution Format Income Statement (LO5-1) Whirly Corporation's most recent income statement is shown below: 0.36 points Total Per Unit Sales (8,000 units) $264,000 $33.00 eBook Variable expenses 152,000 19.00 Contribution margin Fixed expenses Hint 112,000 $14.00 54,600 Net operating income $ 57,400 References Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently): 1. The sales volume increases by 40 units. Whirly Corporation Contribution Income Statement Total Per Unit wk - Cost Vol Profit Saved 13 Exercise 5-4 Computing and Using the CM Ratio (LO 5-3) 0.36 boints Last month when Holiday Creations, Inc., sold 43,000 units, total sales were $309,000, total variable expenses were $241,020, and fixed expenses were $37,100. Required: 1. What is the company's contribution margin (CM) ratio? eBook Hint Contribution margin ratio % References 2. Estimate the change in the company's net operating income if it were to increase its total sales by $2,100. Estimated change in net operating income Saved 14 Required information Exercise 5-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (L05-4) (The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: 1 of 2 Es Selling price Variable expenses Per Unit $ 55 Percent of Sales 100% 60% 33 Book Contribution margin $ 22 40% Hint Fixed expenses are $71,000 per month and the company is selling 4,100 units per month ferences Exercise 5-5 Part 1 Required: 1-a. The marketing manager argues that a $9,500 increase in the monthly advertising budget would increase monthly sales by $22,500. Calculate the increase or decrease in net operating income. Net operating income by Saved 15 Part 2 of 2 Required information Exercise 5-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume [LO5.4) [The following information applies to the questions displayed below) Data for Hermann Corporation are shown below: 0.36 points eBook Selling price Variable expenses Per Unit $ 55 33 Percent of Sales 100% 60% Contribution margin Hint $ 22 40% References Fixed expenses are $71,000 per month and the company is selling 4,100 units per month Exercise 5-5 Part 2 2-a. Refer to the original dato. Management is considering using higher quality components that would increase the variable expense by $4 per unit. The marketing manager believes that the higher quality product would increase sales by 25% per month. Calculate the change in total contribution margin. Total contribution margin 16 Exercise 5-8 Compute the Margin of Safety (LO5-7) 0.36 points Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month's budget appear below. eBook Selling price Variable expenses Fixed expenses Unit sales $29 per unit $16 per unit $11,050 per month Hint 1,000 units per month References Required: 1. Compute the company's margin of safety. (Do not round intermediate calculations.) Margin of safety 2. Compute the company's margin of safety as a percentage of its sales. Round your percentage answer to 2 decimal places (.e 1234 should be entered as 12.34). Margin of safety %