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Porter Company 's most recent contribution format income statement is shown below:
Solution Detail
Price: $3.00
  • From: Business,
  • Posted on: Fri 31 May, 2013
  • Request id: None
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Request Description

 

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%.

 

Solution Description

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Attachments
Ch5 Q2.docx
Ch5 Q2.docx
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