Newlin Company's contribution format income statement for the recent month is shown below: Sales (8,300 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 249,000 157,700 91,300 55,400 $ 35,900 Per Unit $ 30.00 19.00 $ 11.00 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 50 units? 2. What would be the revised net operating income per month if the sales volume decreases by 50 units? 3. What would be the revised net operating income per month if the sales volume is 7,300 units? 1. 2. Revised net operating income Revised net operating income Revised net operating income 3. Selling price Variable expenses Contribution margin Per Unit $ 95 57 $ 38 Percent of Sales 100% 60 40% Fixed expenses are $79,000 per month and the company is selling 3,600 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,400 and monthly sales increase by $17,100? 1-b. Should the advertising budget be increased? Complete this question by entering your answers in the tabs below. Req 1A Req 1B How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,400 and monthly sales increase by $17,100? (Round any unit calculations up to the nearest whole unit.) Net operating income decreases by Req 1A Req 1B Should the advertising budget be increased? Yes No Data for Klauer Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 95 57 Percent of Sales 100% 60 40% $ 38 Fixed expenses are $79,000 per month and the company is selling 3,600 units per month. 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $3 per unit and increase unit sales by 10%. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Req 2A Req 2B Should the higher-quality components be used? OYes No Reg 2A Req 2B Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher- quality components that increase the variable expense by $3 per unit and increase unit sales by 10%. Net operating income by Pierce Phones is considering the introduction of a new model of headphone whose selling price is $15 per unit and whose variable expense is $11 per unit. The company's monthly fixed expense is $10,400. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. (Do not round intermediate calculations.) 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.) baskets 1. Break-even point in unit sales 2 Break-even point in dollar sales 3. Break-even point in unit sales Break-even point in dollar sales baskets
