Reference no: EM132618925
Porter Company 's most recent contribution format income statement is shown below:
TOTAL PER UNIT
Sales (30,000 units) . . . . . . . . . . . . $150,000 $5
Variable expenses . . . . . . . . . . . . . 90,000 3
Contribution margin . . . . . . . . . . . . 60,000 $2
Fixed expenses . . . . . . . . . . . . . . . 50,000
Net operating income . . . . . . . . . . . $ 10,000
Required:
Problem a: Prepare 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 50 cents per unit, and the number of units sold increases by 20%.
3. The selling price increases by 50 cents per unit, fixed expenses increase by $10,000, and the number of units sold decreases by 5%.
4. Variable expenses increase by 20 cents per unit, the selling price increases by 12%, and the number of units sold decreases by 10%.
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