Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (8,500 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 297,500 170,000 127,500 55,800 $ 71,700 Per Unit $ 35.00 20.00 $ 15.00 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 40 units? 2. What would be the revised net operating income per month if the sales volume decreases by 40 units? 3. What would be the revised net operating income per month if the sales volume is 7,500 units? 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income Last month when Holiday Creations, Inc., sold 43,000 units, total sales were $172,000, total variable expenses were $142,760, and fixed expenses were $35,600. 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 sales volume by 525 units and total sales by $2,100? (Do not round intermediate calculations.) % 1. Contribution margin ratio 2. Estimated change in net operating income Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 80 44 $36 Percent of Sales 100% 55 45% Fixed expenses are $76,000 per month and the company is selling 2,500 units per month. 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $4 per unit and increase unit sales by 20%. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Reg 2A Reg 2B Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher- quality components that increase the variable expense by $4 per unit and increase unit sales by 20%. Net operating income by Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 80 44 $ 36 Percent of Sales 100% 55 45% Fixed expenses are $76,000 per month and the company is selling 2,500 units per month. 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $4 per unit and increase unit sales by 20%. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Reg 2A Reg 2B Should the higher-quality components be used? Yes ONO
