Exercise 5-13 Changes in Selling Price, Sales Volume, Variable Cost per Unit, and Total Fixed Costs
[LO5-1, LO5-4]
Miller Company's contribution format income statement for the most recent month is shown below.
Total Per Unit
Sales (20,000 units) $ 300,000 $ 15.00
Variable expenses 180,000 9.00
Contribution margin 120,000 6.00
Fixed expenses 70,000
Net operating Income $ 50,000
Required:
(Consider each case independently):
1. What is the revised net operating income if unit sales increase by 15%?
2. What is the revised net operating income if the selling price decreases by $1.50 per unit and the number of units sold increases by
25%?
3. What is the revised net operating income if the selling price increases by $1.50 per unit, fixed expenses increase by $20,000, and
the number of units sold decreases by 5%?
4. What is the revised net operating income if the selling price per unit increases by 12%, variable expenses increase by 60 cents per
unit, and the number of units sold decreases by 10%?
1. Net operating income
2. Net operating income
3. Net operating income
4. Net operating income
