Sales (24,600 units) $221,400 $9.00
Variable expenses 132,840 5.40
Contribution margin 88,560 $3.60
Fixed expenses 51,660
Net operating income $36,900
1. Assume the sales volume increases by 4,182 units:
a. What is the revised net operating income?
b. What is the percent increase in unit sales?
c. Using the most recent month's degree of operating leverage, what is the percent increase in net operating income?
2. What is the revised net operating income if the selling price decreases by $1.20 per unit and the number of units sold increases by 24%?
3. What is the revised net operating income if the selling price increases by $1.20 per unit, fixed expenses increase by $8,000, 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 30 cents per unit, and the number of units sold decreases by 9%?
1a. Net operating income $ 51,955
1b. Percent increase in unit sales 17%
