Exercise 18 20 (Algo) Computing income effects of different business strategies LO C2 A manufacturers 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 (11,500 units $12 per unit) $ 138,000 Variable costs (11,500 units $7 per unit) 80,500 Contribution margin (11,500 units $5 per unit 57,500 Fixed costs 48,000 Income $ 9,500 1 The 11,500 units produced and sold increases to 12,000 units and fixed costs increase by $6,100 2 Unit selling price decreases by 5 and units produced and sold increase by 6 Hint A unit increase has both a sales and costs impact 3 Fixed costs increase by $21,100, variable costs per unit decrease by $2, and units produced and sold increase by 600

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Exercise 18-20 (Algo) Computing income effects of different business strategies LO C2 A manufacturers contribution margin income statement for the year follows. Prepare contribution margin

Exercise 18-20 (Algo) Computing income effects of different business strategies LO C2

A manufacturers 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 (11,500 units $12 per unit)	$ 138,000
Variable costs (11,500 units $7 per unit)	80,500
Contribution margin (11,500 units $5 per unit	57,500
Fixed costs	48,000
Income	$ 9,500

1. The 11,500 units produced and sold increases to 12,000 units and fixed costs increase by $6,100. 2. Unit selling price decreases by 5% and units produced and sold increase by 6%. Hint: A unit increase has both a sales and costs impact. 3. Fixed costs increase by $21,100, variable costs per unit decrease by $2, and units produced and sold increase by 600.