Question
The Garry Corporation's most recent contribution format income statement is shown below: Total Per unit Sales (15,000 units) $225,000 $15 Variable expenses 135,000 9 Contribution
The Garry Corporation's most recent contribution format income statement is shown below: Total Per unit Sales (15,000 units) $225,000 $15 Variable expenses 135,000 9 Contribution margin 90,000 $ 6 Fixed expenses 35,000 Net operating income $ 55,000 Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently): a. The sales volume increases by 10% and the price decreases by $0.50 per unit. b. The selling price decreases $1.00 per unit, fixed expenses increase by $15,000, and the sales volume decreases by 5%. c. The selling price increases by 25%, variable expense increases by $0.75 per unit, and the sales volume decreases by 15%. d. The selling price increases by $1.50 per unit, variable cost increases by $1.00 per unit, fixed expenses decrease by $15,000, and sales volume decreases by 12%.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started