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Whirly Corporation's most recent Income Statement is shown below:

Total Per Unit

Sales (10,000 units) $350,000 $35.00

Variable expenses 200,000 20.00

Contribution Margin 150,000 $15.00

Fixed expenses 135,000

Net Operating income $15,000

Required: Prepare a new contribution format Income Statement under each of the following conditions (consider each case independently):

1. The sale volume increases by 100 units.

2. The sales volume decreases by 100 units.

3. The sales volume is 9,000 units.

Must show all work.

Respuesta :

erum123

Answer:

case 1  net operating income = 16,500

Case 2 = $13,500

Case 3 = $0

Explanation:                                

Sales Volume  (Increase by 100 units)(Decrease by 100 units)(9000units)  

Sales Volume          10100 units                         9900 units             9000units

Sales

(35×10100)                  353,500

(35×9900)                                                              346,500

(35×9000)                                                                                             315,000

Less: Variable Cost

(20×10100)                  (202,000)

(20×9900)                                                              (198,000)

(20×9000)                                                                                             (180,000)

Contribution               151,500                               148,500                 135,000

Less: Fixed Cost        (135,000)                             (135,000)              (135,000)

Net Operating Income 16,500                               13,500                    0          

variable cost changes with the number of units sold

Fixed cost remains constant irrespective of the number of units produced.

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