Sales (22,200 units) Variable expenses Contribution margin. Fixed expenses Net operating income. Total $ 199,800 119,880 79,920 46,620 $ 33,300 Per Unit $9.00 5.40 $ 3.60 Required: (Consider each of the four requirements independently): 1. Assume the sales volume increases by 3,330 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 $1.10 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 $1.10 per unit, fixed expenses increase by $7,000, 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 20%, variable expenses increase by 30 cents per unit, and the number of units sold decreases by 7%? 1a. Net operating income 1b. Percent increase in unit sales 1c. Percent increase in net operating income 2. Net operating income (loss) 3. Net operating income 4. Net operating income % %
Sales (22,200 units) Variable expenses Contribution margin. Fixed expenses Net operating income. Total $ 199,800 119,880 79,920 46,620 $ 33,300 Per Unit $9.00 5.40 $ 3.60 Required: (Consider each of the four requirements independently): 1. Assume the sales volume increases by 3,330 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 $1.10 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 $1.10 per unit, fixed expenses increase by $7,000, 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 20%, variable expenses increase by 30 cents per unit, and the number of units sold decreases by 7%? 1a. Net operating income 1b. Percent increase in unit sales 1c. Percent increase in net operating income 2. Net operating income (loss) 3. Net operating income 4. Net operating income % %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Sales (22,200 units)
Variable expenses
Contribution margin
Fixed expenses
Net operating income
Total
$ 199,800
119,880
79,920
46, 620
$ 33,300
Per Unit
$9.00
5.40
$ 3.60
Required:
(Consider each of the four requirements independently):
1. Assume the sales volume increases by 3,330 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 $1.10 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 $1.10 per unit, fixed expenses increase by $7,000, 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 20%, variable expenses increase by 30 cents per
unit, and the number of units sold decreases by 7%?
1a. Net operating income
1b. Percent increase in unit sales
1c. Percent increase in net operating income
2. Net operating income (loss)
3. Net operating income
4. Net operating income
%
%
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