Miller Company’s contribution format income statement for the most recent month is shown below:
Total Per Unit
Sales (35,000 units) $ 210,000 $ 6.00
Variable expenses 105,000 3.00
Contribution margin 105,000 $ 3.00
Fixed expenses 46,000
Net operating income $ 59,000
Required:
(Consider each case independently):
1. What is the revised net operating income if unit sales increase by 17%?
2. What is the revised net operating income if the selling price decreases by $1.30 per unit and the number of units sold increases by 23%?
3. What is the revised net operating income if the selling price increases by $1.30 per unit, fixed expenses increase by $7,000, and the number of units sold decreases by 3%?
4. What is the revised net operating income if the selling price per unit increases by 10%, variable expenses increase by 10 cents per unit, and the number of units sold decreases by 8%?