Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Cullumber Markets imports and sells small bear-shaped piatas. In planning for the coming year, the company's owner is evaluating several scenarios. For each scenario under
Cullumber Markets imports and sells small bear-shaped piatas. In planning for the coming year, the company's owner is evaluating several scenarios. For each scenario under consideration, prepare a contribution margin income statement showing the anticipated operating income. Consider each scenario is applied independently to the original data. Last year's income statement is as follows: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income Total $900,000 450,000 450,000 175,000 $275,000 Per Unit $20.00 10.00 $10.00 (a) The sales price increases by 10% and sales volume decreases by 6%. (Round per unit answers to 2 decimal places, eg. 0.38.) Cullumber Markets Income Statement Total Per Unit Sales $ $ Variable expenses Contribution margin $ Fixed expenses Operating income $ eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (b) The sales price increases by 10% and variable cost per unit increases by 6%. (Round per unit answers to 2 decimal places, eg. 0.38.) Cullumber Markets Income Statement Total Per Unit Sales Variable expenses Contribution margin Fixed expenses Operating income eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer c) The sales price decreases by 5% and sales volume increases by 15%. (Round per unit answers to 2 decimal places, eg. 0.38.) Cullumber Markets Income Statement Total Per Unit Sales $ $ Variable expenses Contribution margin $ Fixed expenses Operating income eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (d) Fixed expenses increase by $50,000. (Round per unit answers to 2 decimal places, eg. 0.38.) Cullumber Markets Income Statement Total Per Unit Sales Variable expenses Contribution margin $ Fixed expenses Operating income $ eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (e) The sales price increases by 12%, variable cost per unit increases by 15%, fixed expenses increase by $30,000, and sales volume decreases by 15%. (Round per unit answers to 2 decimal places, eg. 0.38.) Cullumber Markets Income Statement Total Per Unit Sales $ Variable expenses Contribution margin $ Fixed expenses Operating income $ e Textbook and Media Save for Later Attempts: 0 of 3 used Submit
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started