EXERCISE 5-1 The Effect of Changes in Activity on Net Operating Income LO5-1 Whi

Question

EXERCISE 5-1 The Effect of Changes in Activity on Net Operating Income LO5-1 Whirly Corporation's contribution format income statement for the most recent month is shown below Total Per Unit $350,000 $35.00 200,00020.00 Contribution margin . . 150,000 $15.00 35,000 15,000 Net operating income Required Consider each case independently): .What would be the revised net operating income per month if the sales volume increases by 100 units? 2 What would be the revised net operating income per month if the sales volume decreases by 100 units? Whut would be the revised net operating income per month if the sales volum is 9,000units.?

Explanation / Answer

[Variable cost per unit and total fixed costs do not change with change in units],

Case 1 Case 2 Case 3 Contribution margin (15*(10000+100)=$151500 15*(10000-100)=$148500 (15*9000)=$135000 Fixed expenses 135000 135000 135000 Net operating income $16500 $13500 0.

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