Exercise 6-11 Using Contribution Format Income Statement
Miller Company's most recent contribution format income statement is shown below:
Sales (20,000) units $300,000 $15.00
Variable expenses . 180,000 9.00
Contribution margin 120,000 $ 6.00
Fixed expense 70,000
Net operating income $ 50,000
Prepare a new contribution format income statement under each of the following conditions (consider each case independently):
1. The number of units sold increases by 15%.
2. The selling price decreases by $1.50 per unit, and the number of units sold increases by 25%.
3. The selling price increases by $1.5 per unit, fixed expenses increases by $20,000, and the number of units sold decreases by 5%.
4. The selling price increases by 12%, variable expenses increase by 60 cents per unit, and the number of units sold decreases by 10%.