Computing income effects of different business strategies

A manufacturer's contribution margin Income statement for the year follows. Prepare contribution margin income statements for each of the three separate cases below. Contribution Margin Income Statement Sales (10,000 units x $10 per unit) Variable costs (10,000 units x $6 per unit) Contribution margin (10,000 units * $4 per unit Fixed costs Income $ 100,000 60,000 40,000 30,000 $ 10,000 1. The 10,000 units produced and sold increases to 10,400 units and fixed costs increase by $5,000. 2. Unit selling price decreases by 5% and units produced and sold increase by 8%. Hint: A unit increase has both a sales and costs Impact. 3. Fixed costs increase by $20,000, variable costs per unit decrease by $2, and units produced and sold increase by 500. 1. The 10,000 units produced and sold increases to 10,400 units and fixed costs increase by $5,000. Contribution Margin Income Statement Contribution margin Income (loss) 2. Unit selling price decreases by 5% and units produced and sold increase by 8%. Contribution Margin Income Statement Contribution margin Income (loss) 3. Fixed costs increase by $20,000, variable costs per unit decrease by $2, and units produced and sold increase by 500. Contribution Margin Income Statement Contribution margin Income (loss)