| hirly Corporation�s most recent income statement is shown below: |
| Total | Per Unit | ||||
| Sales (7,700 units) | $ | 275200 | $ | 32.00 | |
| Variable expenses | 172000 | 20.00 | |||
| Contribution margin | 103200 | $ | 12.00 | ||
| Fixed expenses | 55800 | ||||
| Net operating income | $ | 47400 | |||
| Required: |
| Prepare a new contribution format income statement under each of the following conditions (consider each case independently): |
| 1. | The sales volume increases by 40 units.
|
Answer
1
Sales Volume Increase by 40
| Whirly Corporation Contribution Income Statement | ||
| Particular | Amount in $ | Per Unit |
| Per Unit Sales | 276480 | 32 |
| Variable expenses | 172800 | 20 |
| Contribution margin | 103680 | 12 |
| Fixed expenses | 55800 | |
| Net operating income | 47880 | |
2
Sales Volume Decrease by 40
| Whirly Corporation Contribution Income Statement | ||
| Particular | Amount in $ | Per Unit |
| Sales | 273920 | 32 |
| Variable expenses | 171200 | 20 |
| Contribution margin | 102720 | 12 |
| Fixed expenses | 55800 | |
| Net operating income | 46920 | |
3
Sales volume is 7600 units
| Whirly Corporation Contribution Income Statement | ||
| Particular | Amount in $ | Per Unit |
| Per Unit Sales | 243200 | 32 |
| Variable expenses | 152000 | 20 |
| Contribution margin | 91200 | 12 |
| Fixed expenses | 55800 | |
| Net operating income | 35400 | |
