March2018wk-2homework.docx - 1 Diana Brown Dr Benson Week-2 Accounting 515 EXERCISE 51 Preparing a Contribution Format Income Statement[LO51 Whirly

March2018wk-2homework.docx - 1 Diana Brown Dr Benson Week-2...

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1 Diana Brown March 17, 2018 Dr. Benson – Week-2 Accounting 515 EXERCISE 5–1 Preparing a Contribution Format Income Statement [LO5–1] Whirly Corporation’s most recent income statement is shown below: Total Per Unit Sales (10,000 units) . . . . . . . . . . . . . . \$350,000 \$35.00 Variable expenses . . . . . . . . . . . . . . . 200,000 20.00 Contribution margin . . . . . . . . . . . . . . 150,000 \$15.00 Fixed expenses . . . . . . . . . . . . . . . . . 135,000 Net operating income ............. \$ 15,000 Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently): 1. The sales volume increases by 100 units. 2. The sales volume decreases by 100 units. 3. The sales volume is 9,000 units. Chapter 5 E5-1 Whirly Corporation Contribution Income Statement Increase By 100 units Total Per Unit Sales (10,100 units) . . . . . . . . . . . . . . \$353,500 \$35.00 (10,000 +100) (10,100*35) Variable expenses . . . . . . . . . . . . . . . 202,000 20.00 (10,100*20) Contribution margin . . . . . . . . . . . . . . 151,500 \$15.00 Fixed expenses . . . . . . . . . . . . . . . . . 135,000 Net operating income ............. \$16,500
2 Whirly Corporation Contribution Income Statement Decrease By 100 units Total Per Unit Sales (9,900 units) . . . . . . . . . . . . . . \$346,500 \$35.00 (9,900*35) Variable expenses . . . . . . . . . . . . . . . 198,000 20.00 (9,900*20) Contribution margin . . . . . . . . . . . . . . 148,500 \$15.00 Fixed expenses . . . . . . . . . . . . . . . . . 135,000 Net operating income ............. \$13,500 (148,500-135,00) Whirly Corporation

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