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F. Naz
F. Naz, Chartered Accountant
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Income Statement

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Using a Contribution Format Statement 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


 


Question- Prepare a new contribution statement under each of the following conditions. Consider each case independently. 


1. The number of units sold increases by 10%


 


2. The selling price decreases by 50 cents per unit, and the number of units sold increase 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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Customer: replied 4 years ago.

Hi Thank you so much for your time! I truly appreciate it. I however realized I made a mistake in wording the very first question. Instead of 10%, it was 15% in this case would the numbers look something like this?


sales= 172,500


variable expenses= 103,500


CM= 69,000


Fixed expenses=50,000


NOI= 19,000


 


Thank you again for all your help!

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