Whirly Corporation’s contribution format income statement for the most recent month is shown below:

Total Per Unit
Sales (7,500 units) $ 255,000 $ 34.00
Variable expenses 142,500 19.00
Contribution margin 112,500 $ 15.00
Fixed expenses 54,600
Net operating income $ 57,900
Required:

(Consider each case independently):

1. What would be the revised net operating income per month if the sales volume increases by 50 units?

2. What would be the revised net operating income per month if the sales volume decreases by 50 units?

3. What would be the revised net operating income per month if the sales volume is 6,500 units?

1. $58,650

2. $57,150

3. $42,900

Explanation:

The computation of revised net operating income per month if

1. The sales volume increases by 50 units.

Total Sales                     $256,700

(7,550 × $34)

Less: Variable expenses  $143,450

(7,550 × $19)

Contribution margin            $113,250

Less: Fixed expenses          $54,600

Net operating income         $58,650

2. The sales volume decreases by 50 units.

Total Sales                            $253,300

(7,450 × $34)

Less: Variable expenses     $141,550

(7,450 × $19)

Contribution margin             $111,750

Less: Fixed expenses           $54,600

Net operating income           $57,150

3. The sales volume is 6,500 units.

Total Sales                        $221,000

(6,500 × $34)

Less: Variable expenses $123,500

(6,500 × $19)

Contribution margin         $97,500

Less: Fixed expenses       $54,600

Net operating income      $42,900

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know