Miller Company’s contribution format income statement for the most recent month is shown below:
Total Per Unit
Sales (33,000 units) $ 231,000 $ 7.00
Variable expenses 132,000 4.00
Contribution margin 99,000 $ 3.00
Fixed expenses 41,000
Net operating income $ 58,000
Required:
(Consider each case independently):
1. What is the revised net operating income if unit sales increase by 12%?
2. 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 22%?
3. What is the revised net operating income if the selling price increases by $1.40 per unit, fixed expenses increase by $7,000, and the number of units sold decreases by 4%?
4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 20 cents per unit, and the number of units sold decreases by 10%?
