Miller Company’s contribution format income statement for the most recent month is shown below:
Total Per Unit
Sales (29,400 units) $ 264,600 $ 9.00
Variable expenses 158,760 5.40
Contribution margin 105,840 $ 3.60
Fixed expenses 61,740
Net operating income $ 44,100
Required:
(Consider each of the four requirements independently):
Assume the sales volume increases by 4,998 units:
What is the revised net operating income?
What is the percent increase in unit sales?
Using the most recent month’s degree of operating leverage, what is the percent increase in net operating income?
What is the revised net operating income if the selling price decreases by $1.40 per unit and the number of units sold increases by 19%?
What is the revised net operating income if the selling price increases by $1.40 per unit, fixed expenses increase by $8,000, and the number of units sold decreases by 7%?
What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 10 cents per unit, and the number of units sold decreases by 6%?
