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Whirly Corporations most recent income statement is shown below: Total Per Unit Sales (8,100 units) $ 283,500 $ 35.00 Variable expenses 153,900 19.00 Contribution margin

Whirly Corporations most recent income statement is shown below:

Total Per Unit
Sales (8,100 units) $ 283,500 $ 35.00
Variable expenses 153,900 19.00
Contribution margin 129,600 $ 16.00
Fixed expenses 55,100
Net operating income $ 74,500

Required:

Prepare a new contribution format income statement under each of the following conditions (consider each case independently):

1.

The sales volume increases by 50 units.

Whirly Corporation
Contribution Income Statement
Total Per Unit
Sales $283,500 $35
Variable expenses 153,900 19
Contribution margin 129,600 $16
Fixed expenses 55,100
Net operating income $74,500
2.

The sales volume decreases by 50 units.

Whirly Corporation
Contribution Income Statement
Total Per Unit
0 $0
0
3.

The sales volume is 7,100 units.

Whirly Corporation
Contribution Income Statement
Total Per Unit
0 $0
$0

Outback Outfitters sells recreational equipment. One of the companys products, a small camp stove, sells for $130 per unit. Variable expenses are $91 per stove, and fixed expenses associated with the stove total $163,800 per month.

3.

At present, the company is selling 9,000 stoves per month. The sales manager is convinced that a 10% reduction in the selling price would result in a 25% increase in monthly sales of stoves. Prepare two contribution format income statements, one under present operating conditions, and one as operations would appear after the proposed changes.

Outback Outfitters
Present Proposed
9,000 Stoves Stoves
Total Per unit Total Per unit
0 $0 0 $0
$0 $0

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