Chapter 5

Chapter 5

Exercise 5-1 (20 minutes)

1. The new income statement would be:

| | |Total |Per Unit |

| |Sales (8,050 units) |$209,300 |$26.00 |

| |Variable expenses | 144,900 | 18.00 |

| |Contribution margin |64,400 |$ 8.00 |

| |Fixed expenses |  56,000 | |

| |Net operating income |$  8,400 | |

You can get the same net operating income using the following approach.

| |Original net operating income |$8,000 |

| |Change in contribution margin |    400 |

| |(50 units × $8.00 per unit) | |

| |New net operating income |$8,400 |

2. The new income statement would be:

| | |Total |Per Unit |

| |Sales (7,950 units) |$206,700 |$26.00 |

| |Variable expenses | 143,100 | 18.00 |

| |Contribution margin |63,600 |$ 8.00 |

| |Fixed expenses |  56,000 | |

| |Net operating income |$  7,600 | |

You can get the same net operating income using the following approach.

| |Original net operating income |$8,000 |

| |Change in contribution margin...