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Miller Company's contribution format income statement for the moss recent month is shown below  $ 208,mo 292,000 $ $

Accounting Apr 02, 2021

Miller Company's contribution format income statement for the moss recent month is shown below 
$ 208,mo 292,000 $ $.00 9.00 132,000 91,00o $ 2.00 
Require:I: (Consider each case independently): 
1. What is the revised net operating income if unit sales increase by 11%2 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%2 3. What is the revised net operafing income if the selling price increases by $1.20 per unit, fixed expenses increase by $6,000, antl the number of units sold decreases 1,330 4. What is the revised net operafing income if the selling price per unit increases by 20% variable expenses increase by 30 cents per unit, and the number of units sold decreases by WV 
 

Expert Solution

1) The number of units sold increased by 11%:

Miller Company
Contribution Income Statement
Particulars Amount ($)
   
Sales [(44,000 units*(1+11%)*$7) 341880
Less: Variable Expenses [(44,000 units*(1+11%)*$4) 195360
Contribution Margin 146520
Less: Fixed Expenses 41000
Net Operating Income 105520

 

2) The selling price decreases by $1.20 per unit, and the number of units sold increases by 24%. 

Miller Company
Contribution Income Statement
Particulars Amount ($)
   
Sales [(44,000 units*(1+24%)*($7-$1.20)) 316448
Less: Variable Expenses [(44,000 units*(1+24%)*$4) 218240
Contribution Margin 98208
Less: Fixed Expenses 41000
Net Operating Income 57208

 

 

3) The selling price increases by $1.20 per unit, fixed expenses increase by $6,000, and the number of units decreases by 3%.

Miller Company
Contribution Income Statement
Particulars Amount ($)
   
Sales [(44,000 units*(1-3%)*($7+$1.20)) 349976
Less: Variable Expenses [(44,000 units*(1-3%)*$4) 170720
Contribution Margin 179256
Less: Fixed Expenses ($41,000+$6,000) 47000
Net Operating Income 132256

 

4) The selling price increases by 20%, variable expenses increase by 30 cents per unit, and the number of units sold decreases by 8%.

Miller Company
Contribution Income Statement
Particulars Amount ($)
   
Sales [(44,000 units*(1-8%)*($7*(1+0.20)) 340032
Less: Variable Expenses [(44,000 units*(1-8%)*($4+0.30)) 174064
Contribution Margin 165968
Less: Fixed Expenses  41000
Net Operating Income 124968

 

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