THE CONTRIBUTION FORMAT INCOME STATEMENT FOR THE MONTH OF JULY 2021 IS DETAILED BELOW:

TOTAL PER UNIT

SALES (20,000 UNITS) $160,000 $8.00

VARIABLE COSTS 100,000 $5.00

CONTRIBUTION MARGIN $60,000 $3.00

FIXED COSTS $45,000

NET OPERATING INCOME $15,000

REQUIRED:

1. IF SALES INCREASE BY 1,000 UNITS PER MONTH, WHAT WOULD THE NET OPERATING INCOME?
2. IF SALES DECREASE BY 1,000 UNITS PER MONTH, WHAT WOULD THE NET OPERATING INCOME?
3. IF SALES VOLUME PER MONTH WERE 15,000 UNIT, WHAT WOULD BE THE NET OPERATING INCOME?

NOTE: YOUR OPTION: YOU CAN CREATE A NEW CONTRIBUTION MARGIN INCOME STATEMENT FOR EACH OF THE THREE SCENARIOS OR SIMPY USE THE UNIT CM, CM RATION FOR EXAMPLE, TO SOLVE EACH OF THE THREE.