4. The selling price increases by 20%, variable expenses increase by 30 cents pe
ID: 2549144 • Letter: 4
Question
4. The selling price increases by 20%, variable expenses increase by 30 cents per unit, and the number of units sold decreases by 14%. T-Mobile LTE 7:34 PM ezto.mheducation.com 47% 4 Miller Company's most recent contribution format income statement is shown below 29000 $3.00 Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently) (Do not round intermediate calculations. Round your "Per unit" answers to 2 decimal places.) The number of units sold increases by 13%. 2 The selling price decreases by $1.30 per unit, and the number of units sold increases by 16%. 3 The selling price increases by $1.30 per unit, fixed expenses increase by $5,000, and the number of units sold decreases by 3%. income Stabmen
Explanation / Answer
Answer
ORIGINAL DATA
Units
per unit
Amount
Sales
43000
$ 8.00
$ 3,44,000.00
(-) variable cost
43000
$ 5.00
$ 2,15,000.00
Contribution margin
43000
$ 3.00
$ 1,29,000.00
(-) Fixed Expenses
$ 45,000.00
Net Operating income
$ 84,000.00
Requirement 1
Units
per unit
Amount
Sales
48590
$ 8.00
$ 3,88,720.00
(-) variable cost
48590
$ 5.00
$ 2,42,950.00
Contribution margin
48590
$ 3.00
$ 1,45,770.00
(-) Fixed Expenses
$ 45,000.00
Net Operating income
$ 1,00,770.00
Requirement 2
Units
per unit
Amount
Sales
49880
$ 6.70
$ 3,34,196.00
(-) variable cost
49880
$ 5.00
$ 2,49,400.00
Contribution margin
49880
$ 1.70
$ 84,796.00
(-) Fixed Expenses
$ 45,000.00
Net Operating income
$ 39,796.00
Requirement 3
Units
per unit
Amount
Sales
41710
$ 9.30
$ 3,87,903.00
(-) variable cost
41710
$ 5.00
$ 2,08,550.00
Contribution margin
41710
$ 4.30
$ 1,79,353.00
(-) Fixed Expenses
$ 50,000.00
Net Operating income
$ 1,29,353.00
Requirement 4
Units
per unit
Amount
Sales
36980
$ 9.60
$ 3,55,008.00
(-) variable cost
36980
$ 6.50
$ 2,40,370.00
Contribution margin
36980
$ 3.10
$ 1,14,638.00
(-) Fixed Expenses
$ 45,000.00
Net Operating income
$ 69,638.00
ORIGINAL DATA
Units
per unit
Amount
Sales
43000
$ 8.00
$ 3,44,000.00
(-) variable cost
43000
$ 5.00
$ 2,15,000.00
Contribution margin
43000
$ 3.00
$ 1,29,000.00
(-) Fixed Expenses
$ 45,000.00
Net Operating income
$ 84,000.00
Requirement 1
Units
per unit
Amount
Sales
48590
$ 8.00
$ 3,88,720.00
(-) variable cost
48590
$ 5.00
$ 2,42,950.00
Contribution margin
48590
$ 3.00
$ 1,45,770.00
(-) Fixed Expenses
$ 45,000.00
Net Operating income
$ 1,00,770.00
Requirement 2
Units
per unit
Amount
Sales
49880
$ 6.70
$ 3,34,196.00
(-) variable cost
49880
$ 5.00
$ 2,49,400.00
Contribution margin
49880
$ 1.70
$ 84,796.00
(-) Fixed Expenses
$ 45,000.00
Net Operating income
$ 39,796.00
Requirement 3
Units
per unit
Amount
Sales
41710
$ 9.30
$ 3,87,903.00
(-) variable cost
41710
$ 5.00
$ 2,08,550.00
Contribution margin
41710
$ 4.30
$ 1,79,353.00
(-) Fixed Expenses
$ 50,000.00
Net Operating income
$ 1,29,353.00
Requirement 4
Units
per unit
Amount
Sales
36980
$ 9.60
$ 3,55,008.00
(-) variable cost
36980
$ 6.50
$ 2,40,370.00
Contribution margin
36980
$ 3.10
$ 1,14,638.00
(-) Fixed Expenses
$ 45,000.00
Net Operating income
$ 69,638.00
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