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Exercise 5-1 The Effect of Changes in Activity on Net Operating Income (LO5-1] Whirly Corporation's contribution format income statement for the most recent month is
Exercise 5-1 The Effect of Changes in Activity on Net Operating Income (LO5-1] Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (8,100 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 275,400 162.000 113, 400 55.000 $ 58, 400 Per Unit $ 34.00 20.00 $ 14.00 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 60 units? 2. What would be the revised net operating income per month if the sales volume decreases by 60 units? 3. What would be the revised net operating income per month if the sales volume is 7100 units? 1 67 450 2 Revised net operating income Revised net operating income Revised net operating income 64.750 3 $ 51100 Exercise 5-4 Computing and Using the CM Ratio (LO5-3) Last month when Holiday Creations, Inc., sold 40,000 units, total sales were $307,000, total variable expenses were $245,600, and fixed expenses were $38,300. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase total sales by $2,100? (Do not round intermediate calculations.) 1. Contribution margin ratio 2. Estimated change in net operating income
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