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Sheridan 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

Sheridan 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, the 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:

Total Per Unit
Sales revenue $1,368,000 $24.00
Variable expenses 456,000 8.00
Contribution margin 912,000 $16.00
Fixed expenses 175,000
Operating income $737,000

(a)

The sales price increases by10% and sales volume decreases by4%. (Round per unit answers to 2 decimal places, e.g. 0.38.)

Sheridan 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

(b)

The sales price increases by12% and variable cost per unit increases by6%.(Round per unit answers to 2 decimal places, e.g. 0.38.)

Sheridan 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.)

Sheridan 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.)

Sheridan 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.)

Sheridan 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

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