Homework SourseMiller Companys most recent contribution format income state
Miller Company’s most recent contribution format income statement is shown below:
1. The number of units sold increases by 19%.
2. The selling price decreases by $1.20 per unit, and the number of units sold increases by 21%.
3. The selling price increases by $1.20 per unit, fixed expenses increase by $8,000, and the number of units sold decreases by 2%.
4. The selling price increases by 10%, variable expenses increase by 20 cents per unit, and the number of units sold decreases by 6%.
| Total | Per Unit | |
| Sales (32,000 units) | $320,000 | $10.00 |
| Variable expenses | 224,000 | 7.00 |
| Contribution margin | 96,000 | $3.00 |
| Fixed expenses | 43,000 | |
| Net operating income | $ 53,000 | |
Solution
Ans.1 Miller\'s Company Income Statement Particulars Amt.($) Sales (38,080units @10) (W.N.1) 380,800 Less: Variable expenses ($7 p.u.) 266,560 Contribution Margin 114,240 Less: Fixed Expenses 43,000 Net Operating Income 71,240 Work.Note:- The number of units sold increases by 19%. Total Units Sold= 32,000 + (32,000*19%) = 38,080 Ans.2 Miller\'s Company Income Statement Particulars Amt.($) Sales (38,720units @8.80) (W.N.1&2) 340,736 Less: Variable expenses ($7 p.u.) 266,560 Contribution Margin 74,176 Less: Fixed Expenses 43,000 Net Operating Income 31,176 Work.Note:- 1).The number of units sold increases by 19%. Total Units Sold= 32,000 + (32,000*21%) = 38,720 2).Selling price decreases by $1.20 per unit. Selling price = $ (10 - 1.20) = $ 8.80 Ans.3 Miller\'s Company Income Statement Particulars Amt.($) Sales (31,360units @11.20) (W.N.1&2) 351,232 Variable expenses ($7 p.u.) 266,560 Contribution Margin 84,672 Less: Fixed Expenses (W.N.3) 51,000 Net Operating Income 33,672 Work.Note:- 1).The number of units sold decreases by 2%. Total Units Sold= 32,000 - (32,000*2%) = 31,360 2).Selling price decreases by $1.20 per unit. Selling price = $ (10 + 1.20) = $ 11.20 3).Fixed expenses increases by $8,000 Ans.4 Miller\'s Company Income Statement Particulars Amt.($) Sales (30,080units @11) (W.N.1&2) 330,880 Less: Variable expenses (W.N.3) 319,872 Contribution Margin 11,008 Less: Fixed Expenses 43,000 Net Operating Income (31,992) Work.Note:- 1).The number of units sold decreases by 6%. Total Units Sold= 32,000 - (32,000*6%) = 30,080 2).Selling price increases by 10%. Selling price = $10 +(10*10%) = $ 11.00 3).Variable expenses increases by 20% per unit. Variable price = $7 + (7*20%) = $ 8.40
