MBL4307-MODULE OVERVIEW-2018.pdf - Adobe Reader File Edit View Document Tools Wi

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MBL4307-MODULE OVERVIEW-2018.pdf - Adobe Reader File Edit View Document Tools Window Help 14/14120%Find Question 3 10 Marks Miller Company's most recent contribution format income statement is shown below: Total Per unit Sales (20,000 units) Variable expenses Contribution margin Fixed expenses Net operating income 300,000 180,000 120,000 70,000 50,000 15.00 9.00 6.00 REQUIRED Prepare a new contribution format Statement of Comprehensive Income (Income Statement) under each of the following conditions (consider each case independently) 3.1 The number of units sold increases by 15% 3.2 The selling price decreases by R1.50 per unit, and the number of units sold increases by 25% The selling price increases by R1.50 per unit, fixed expenses increase by R20,000, and the number of units sold decreases by 5% 3.3 Avate Windows Settings to activat 3.4 The selling price increases by 12%, variable expenses increase by 60 cents per unit, Windows. and the number of units sold decreases by 10% 15:30 O Type here to search

Explanation / Answer

Ans.3.1 Increased number of units sold (20000 + 15%) = 23000 Sales (23000*15) 345000 Less: Variable expenses (23000*9) 207000 Contribution margin 138000 Less: Fixed costs 70000 Net operating income 68000 Ans.3.2 Decreased selling price (15-1.5)   = 13.5 Increased number of units sold (20000 + 25%) = 25000 Sales (25000*13.5) 337500 Less: Variable expenses (25000*9) 225000 Contribution margin 112500 Less: Fixed costs 70000 Net operating income 42500 Ans.3.3 Increased selling price (15+1.5)   = 16.5 Decreased number of units sold (20000 -5%) = 19000 New fixed expenses (70000+20000)    =    90000 Sales (19000*16.5) 313500 Less: Variable expenses (19000*9) 171000 Contribution margin 142500 Less: Fixed costs 90000 Net operating income 52500 Ans.3.4 Increased selling price (15+12%)   = 16.8 Increased variable cost per unit (9+0.60) = 9.60 Decreased number of units sold (20000 -10%) = 18000 Sales (18000*16.8) 313500 Less: Variable expenses (18000*9.60) 171000 Contribution margin 142500 Less: Fixed costs 70000 Net operating income 72500

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