Question
Aladin Company Manufactures small battery that is used in clocks, toys and some other electronic devices. The last month's income statement of Aladin is given
Aladin Company Manufactures small battery that is used in clocks, toys and some other electronic devices. The last month's income statement of Aladin is given below:
Total
Per Unit
Sales (30,000 batteries)
$300,000
$10
Less variable expenses
$180,000
$6
Contribution Margin
$120,000
$4
Fixed expenses
$100,000
Net operating income
$20,000
Required:
Make adin's new income statement under each of the following conditions:
1. The sales colume increase by 15%.
2. The selling price decreases by 20% per unit, and the sales volume increase by 30%.
3. The selling price increases by 50% per unit, fixed expenses increase by $20,000 and the sales volume decreases by 5%.
4. Variable expenses increases by 20% per unit, the selling price increase by 12%, and the sales volume decrease by 10%.
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