Question

Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (8,900 units) $ 293,700 $ 33.00 Variable expenses 178,000 20.00 Contribution margin 115,700 $ 13.00 Fixed expenses 55,700 Net operating income $ 60,000 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 80 units? 2. What would be the revised net operating income per month if the sales volume decreases by 80 units? 3. What would be the revised net operating income per month if the sales volume is 7,900 units?

Answer 1

1. $61,040
2. $58,960
3. $47,000

Step-by-step explanation:

units sold units sold units sold units sold

8,900 8,980 8,820 7,900

Total sales $293,700 $296,340 $291,060 $260,700

Variable costs ($178,000) ($179,600) ($176,400) ($158,000)

Contribution margin $115,700 $116,740 $114,660 $102,700

Period costs ($55,700) ($55,700) ($55,700) ($55,700)

Operating income $60,000 $61,040 $58,960 $47,000