Whirly Corporation's contribution format income statement for the most recent month is shown below: Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 30 units? 2. What would be the revised net operating income per month if the sales volume decreases by 30 units? 3. What would be the revised net operating income per month if the sales volume is 6,700 units? Required information Exercise 6-5 (Algo) 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: Fixed expenses are $86,000 per month and the company is selling 2,800 units per month. Exercise 6-5 (Algo) Part 1 Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,100, the monthly sales volume increases by 100 units, and the total monthly sales increase by $13,000 ? 1-b. Should the advertising budget be increased? Complete this question by entering your answers in the tabs below. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,100, the monthly sales volume increases by 100 units, and the total monthly sales increase by $13,000 ? (Do not round intermediate calculations.) 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,100, the monthly sales volume increases by 100 units, and the total monthly sales increase by $13,000? 1-b. Should the advertising budget be increased? Complete this question by entering your answers in the tabs below. Should the advertisin pe increased? Required information Exercise 6-5 (Algo) 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: Fixed expenses are $86,000 per month and the company is selling 2,800 units per month. Exercise 6-5 (Algo) Part 2 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 $6 per unit and increase unit sales by 15%. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higherquality components that increase the variable expense by $6 per unit and increase unit sales by 15%. 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 $6 per unit and increase unit sales by 15%. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Should the higher-quality components be used? Lin Corporation has a single product whose selling price is $140 per unit and whose variable expense is $70 per unit. The company's monthly fixed expense is $32,250. Required: 1. Calculate the unit sales needed to attain a target profit of $8,000. (Do not round intermediate calculations.) 2. Calculate the dollar sales needed to attain a target profit of $8,700. (Round your intermediate calculations to the nearest whole number.) Required: 1. What is the company's margin of safety? (Do not round intermediate calculations.) 2. What is the company's margin of safety as a percentage of its sales? (Round your percentage answer to 2 decimal places (i.e. .1234 should be entered as 12.34).) Required: 1. What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 6% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. Complete this question by entering your answers in the tabs below. What is the company's degree of operating leverage? (Round your answer to 2 decimal places.) Required: I. What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 6% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. Complete this question by entering your answers in the tabs below. Using the degree of operating leverage, estimate the impact on net operating income of a 6% increase in unit sales. (Round your intermediate calculations to 2 decimal places. Round your percentage answer to 2 decimal places (i.e .1234 should be entered as 12.34).) Required: . What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 6% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. Complete this question by entering your answers in the tabs below. Construct a new contribution format income statement for the company assuming a 6% increase in unit sales. Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: Required: 1. What is the overall contribution margin (CM) ratio for the company? 2. What is the company's overall break-even point in dollar sales? 3. Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales fo the two products. Complete this question by entering your answers in the tabs below. What is the overall contribution margin (CM) ratio for the company? Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: Required: 1. What is the overall contribution margin (CM) ratio for the company? 2. What is the company's overall break-even point in dollar sales? 3. Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products. Complete this question by entering your answers in the tabs below. What is the company's overall break-even point in dollar sales? (Do not round intermediate calculations.) Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: Required: 1. What is the overall contribution margin (CM) ratio for the company? 2. What is the company's overall break-even point in dollar sales? 3. Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products. Complete this question by entering your answers in the tabs below. Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products. (Do not round intermediate calculations. Round your answers to the nearest dollar amount.)
