Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (9,000 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 297,000 171,000 126,000 55,100 $ 70,900 Per Unit $ 33.00 - 19.00 $ 14.00 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 90 units? 2. What would be the revised net operating income per month if the sales volume decreases by 90 units? 3. What would be the revised net operating income per month if the sales volume is 8,000 units? 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income Exercise 6-4 Computing and using the CM Ratio (LO6-3) Last month when Holiday Creations, Inc., sold 39,000 units, total sales were $287,000, total variable expenses were $226,730, and fixed expenses were $35,700. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase total sales by $2,400? (Do not round intermediate calculations.) 1. Contribution margin ratio 2. Estimated change in net operating income Exercise 6-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (L06-4) (The following information applies to the questions displayed below) Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 90 63 Percent of Sales 1004 70 304 $ 27 Fixed expenses are $78,000 per month and the company is selling 3,500 units per month. Exercise 6-5 Part 1 Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,300 and monthly sales increase by $16,200? 1.b. Should the advergising budget be increased? ences Complete this question by entering your answers in the tabs below. Reg Reg 10 How much wil net operating income increase (decrease) per month if the monthly advertising budget increases by $8,300 and monthly sales increase by $16,2007 (Round any unit calculations up to the nearest whole unit.) Net operating income by 3 Exercise 6-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (LO6-4) [The following information applies to the questions displayed below) Data for Hermann Corporation are shown below: of 2 Selling price Variable expenses Contribution margin Per Unit $ 90 63 $ 27 Percent of Sales 100 70 304 ook Fixed expenses are $78,000 per month and the company is selling 3,500 units per month. Hint Exercise 6-5 Part 1 Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget Increases by $8,300 and monthly sales increase by $16,200? 1-b. Should the advertising budget be increased? rences Complete this question by entering your answers in the tabs below. Reg 1A Rear Should the advertising budget be increased? No
