Thursday, August 15, 2013

Porter Company's most recent contribution format income statement is shown below:

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:

Prepare a new contribution format income statement under each of the following conditions (consider each case independently): (Input all amounts as positive values except losses which should be indicated by a minus sign. Do not round intermediate calculations. Round your \"Per unit\" answers to 2 decimal places. Omit the \"$\" sign in your response.)



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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