Question
The Wings Corporation's most recent contribution format income statement is shown below: Total Per unit Sales (10,000 units)....................... $600,000 $60 Variable expenses.......................... 380,000 38 Contribution
The Wings Corporation's most recent contribution format income statement is shown below:
|
| Total | Per unit |
| Sales (10,000 units)....................... | $600,000 | $60 |
| Variable expenses.......................... | 380,000 | 38 |
| Contribution margin...................... | 220,000 | $ 22 |
| Fixed expenses.............................. | 195,000 |
|
| Net operating income.................... | $ 25,000 |
|
Required:
Prepare a new contribution format income statement under each of the following conditions (consider each case independently)
The sales volume increases by 10% and the price decreases by $2.00 per unit.
The selling price increases by $5.00 per unit, fixed expenses increase by $35,000, and the sales volume decreases by 10%.
The selling price increases by 30%, variable expense increases by $4.00 per unit, and the sales volume decreases by 20%.
The selling price increases by $4.50 per unit, variable cost increases by $6.00 per unit, fixed expenses decrease by $55,000, and sales volume increases by 10%.
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