3-30 CVP analysis (LO 3)

CB Markets imports and sells small bear-shaped pinatas. In planning for the coming year, the companys owner is evaluating several scenarios. For each scenario under consideration, prepare a contribution margin income statement showing the anticipated operating income. Consider each scenario independently. Last years income statement is as follows:

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

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%.