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Exercise 6-1 The Effect of Changes in Activity on Net Operating Income [LO6-1] Whirly Corporations...

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Accounting

Exercise 6-1 The Effect of Changes in Activity on Net Operating Income [LO6-1]

Whirly Corporations contribution format income statement for the most recent month is shown below:

Total Per Unit
Sales (8,300 units) $ 257,300 $ 31.00
Variable expenses 166,000 20.00
Contribution margin 91,300 $ 11.00
Fixed expenses 54,400
Net operating income $ 36,900

Required:

(Consider each case independently):

1. What would be the revised net operating income per month if the sales volume increases by 40 units?

2. What would be the revised net operating income per month if the sales volume decreases by 40 units?

3. What would be the revised net operating income per month if the sales volume is 7,300 units?

1 Revised net operating income
2 Revised net operating income
3 Revised net operating income

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