Question 13

Carla Vista 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:

(a)

The sales price increases by10% and sales volume decreases by6%. (Round per unit answers to 2 decimal places, e.g. 0.38.)

(b)

The sales price increases by10% and variable cost per unit increases by6%.(Round per unit answers to 2 decimal places, e.g. 0.38.)

Carla Vista Markets Income Statement
		Total		Per Unit
Sales		$enter a dollar amount		$enter a dollar amount rounded to 2 decimal places
Variable expenses		enter a dollar amount		enter a dollar amount rounded to 2 decimal places
Contribution margin		enter a total dollar amount		$enter a total dollar amount rounded to 2 decimal places
Fixed expenses		enter a dollar amount
Operating income		$enter a total dollar amount

(c)

The sales price decreases by5% and sales volume increases by15%.(Round per unit answers to 2 decimal places, e.g. 0.38.)

Carla Vista Markets Income Statement
		Total		Per Unit
Sales		$enter a dollar amount		$enter a dollar amount rounded to 2 decimal places
Variable expenses		enter a dollar amount		enter a dollar amount rounded to 2 decimal places
Contribution margin		enter a total dollar amount		$enter a total dollar amount rounded to 2 decimal places
Fixed expenses		enter a dollar amount
Operating income		$enter a total dollar amount

(d)

Fixed expenses increase by $40,000.(Round per unit answers to 2 decimal places, e.g. 0.38.)

Carla Vista Markets Income Statement
		Total		Per Unit
Sales		$enter a dollar amount		$enter a dollar amount rounded to 2 decimal places
Variable expenses		enter a dollar amount		enter a dollar amount rounded to 2 decimal places
Contribution margin		enter a total dollar amount		$enter a total dollar amount rounded to 2 decimal places
Fixed expenses		enter a dollar amount
Operating income		$enter a total dollar amount

(e)

The sales price increases by12%, variable cost per unit increases by15%, fixed expenses increase by $30,000, and sales volume decreases by15%.(Round per unit answers to 2 decimal places, e.g. 0.38.)

Carla Vista Markets Income Statement
		Total		Per Unit
Sales		$enter a dollar amount		$enter a dollar amount rounded to 2 decimal places
Variable expenses		enter a dollar amount		enter a dollar amount rounded to 2 decimal places
Contribution margin		enter a total dollar amount		$enter a total dollar amount rounded to 2 decimal places
Fixed expenses		enter a dollar amount
Operating income		$enter a total dollar amount

Current Attempt in Progress Carla Vista Markets imports and sells small bear-shaped pinatas. In planning for the coming year, t several scenarios. For each scenario under consideration, prepare a contribution margin income st operating income. Consider each scenario is applied independently to the original data. Last year's Total Per Unit Sales revenue $1,080,000 $24.00 Variable expenses 450,000 10.00 Contribution margin 630,000 $14.00 Fixed expenses 175,000 Operating income $455,000(b) Your answer is partially correct. The sales price increases by 10% and variable cost per unit increases by 6%. (Round per unit answers to 2 decimal places, e.g. 0.38.) Carla Vista Markets Income Statement Total Per Unit Sales 1267200 $ 26.40 Variable expenses 607200 11.66 Contribution margin 651360 $ 14.74 Fixed expenses 175000 i Operating income $ 476360(c) The sales price decreases by 5% and sales volume increases by 15%. (Round per unit answers to 2 decimal places, e.g. 0.38.) Carla Vista Markets Income Statement Total Per Unit Sales $ Variable expenses Contribution margin 5 Fixed expenses Operating income $ eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (d) Fixed expenses increase by $40,000. (Round per unit answers to 2 decimal places, e.g. 0.38.) Carla Vista 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) Your answer is partially correct. 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, e.g. 0.38.) Carla Vista Markets Income Statement Total Per Unit Sales 1,100,575 26.88 Variable expenses 517,942 12.65 Contribution margin 582,633 14.23 Fixed expenses 205,000 Operating income 377,633 eTextbook and Media Save for Later Attempts: 1 of 3 used Submit