Tuesday 31 July 2012

Wheeler Corporation’s most recent income statement follows:

Exercise 5-1 Preparing a Contribution Format Income Statement [LO1]
Wheeler Corporation’s most recent income statement follows:

 Total Per Unit
  Sales (8,000 units)  $ 208,000    $ 26.00
  Variable expenses 144,000   18.00





  Contribution margin 64,000    $ 8.00
  Fixed expenses 56,000  







  Net operating income  $ 8,000  






Required:
Prepare a new contribution format income statement under each of the following conditions (consider each case independently):
1.
The sales volume increases by 50 units. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.)

Contribution Income Statement
        Total
  Sales correct $ 209,300 correct  
  Variable expenses correct 144,900 correct  

  Contribution margin correct 64,400 correct  
  Fixed expenses correct 56,000 correct  

  Net operating income (loss) correct $ 8,400 correct  




2.
The sales volume declines by 50 units. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.)

Contribution Income Statement
        Total
  Sales correct $ 206,700 correct  
  Variable expenses correct 143,100 correct

  Contribution margin correct 63,600 correct  
  Fixed expenses correct 56,000 correct

  Net operating income (loss) correct $ 7,600 correct




3. The sales volume is 7,000 units. (Input all amounts as positive values except losses which should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Contribution Income Statement
        Total
  Sales correct $ 182,000 correct  
  Variable expenses correct 126,000 correct

  Contribution margin correct 56,000 correct  
  Fixed expenses correct 56,000 correct

  Net operating income (loss) correct $ 0 correct

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