Miller Company's contribution format income statement for the most recent month is shown below: Total Sales...
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Miller Company's contribution format income statement for the most recent month is shown below: Total Sales (25,200 units) Variable expenses $ 226,800 136,080 Contribution margin 90,720 Per Unit $ 9.00 5.40 $ 3.60 Fixed expenses 52,920 Net operating income $ 37,800 Required: (Consider each of the four requirements independently): 1. Assume the sales volume increases by 4,284 units: a. What is the revised net operating income? b. What is the percent increase in unit sales? c. Using the most recent month's degree of operating leverage, what is the percent increase in net operating income? 2. What is the revised net operating income if the selling price decreases by $1.20 per unit and the number of units sold increases by 21%? 3. What is the revised net operating income if the selling price increases by $1.20 per unit, fixed expenses increase by $6,000, and the number of units sold decreases by 6%? 4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 30 cents per unit, and the number of units sold decreases by 12%? Answer is complete but not entirely correct. 1a. Net operating income $ 53,222 1b. Percent increase in unit sales 17 % 1c. Percent increase in net operating income 41 % 2. Net operating income (loss) $ 12,499 3. Net operating income $ 63,040 4. Net operating income $ 61,942 Miller Company's contribution format income statement for the most recent month is shown below: Total Sales (25,200 units) Variable expenses $ 226,800 136,080 Contribution margin 90,720 Per Unit $ 9.00 5.40 $ 3.60 Fixed expenses 52,920 Net operating income $ 37,800 Required: (Consider each of the four requirements independently): 1. Assume the sales volume increases by 4,284 units: a. What is the revised net operating income? b. What is the percent increase in unit sales? c. Using the most recent month's degree of operating leverage, what is the percent increase in net operating income? 2. What is the revised net operating income if the selling price decreases by $1.20 per unit and the number of units sold increases by 21%? 3. What is the revised net operating income if the selling price increases by $1.20 per unit, fixed expenses increase by $6,000, and the number of units sold decreases by 6%? 4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 30 cents per unit, and the number of units sold decreases by 12%? Answer is complete but not entirely correct. 1a. Net operating income $ 53,222 1b. Percent increase in unit sales 17 % 1c. Percent increase in net operating income 41 % 2. Net operating income (loss) $ 12,499 3. Net operating income $ 63,040 4. Net operating income $ 61,942
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Related Book For
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
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