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F. Naz, Chartered Accountant

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This is the original contribution margin income statement.

Resolved Question:

This is the original contribution margin income statement. You will be adjusting this statement for each condition, #1-#4
Per Unit Total
Sales 5 $150,000
Variable Costs 3 90,000
Contribution margin2 60,000
Fixed expense 50,000
Net operating income $10,000
No. of units 30,000
Condition #1--number of units sold increases by 15%
Show computations:Per Unit Total
Sales 5 $150,000
Variable Costs 3 90,000
Contribution margin2 60,000
Fixed expense 50,000
Net operating income $10,000
No. of units 30,000
Condition #2--The selling price decreases by 50 cents per unit, and the number o units sold increases by 20%
Show computations:Per Unit Total
Sales 5 $150,000
Variable Costs3 90,000
Contribution margin2 60,000
Fixed expense 50,000
Net operating income $10,000

Condition #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%.
Show computations:
Per Unit Total
Sales 5 $150,000
Variable Costs 3 90,000
Contribution margin 2 60,000
Fixed expense 50,000
Net operating income $10,000
No. of units 30,000

Condition #4--Variable expenses increase by 20 cents per unit, the selling price increases by 12% and the number of units sold decreases by 10%.
Show computations:
Per Unit Total
Sales 5 $150,000
Variable Costs 3 90,000
Contribution margin 2 60,000
Fixed expense 50,000
Net operating income $10,000
No. of units 30,000