The following is Allison Corporation's contribution format income statement for last month:

The company has no beginning or ending inventories. The company produced and sold 10,000 units last month.
-If sales increase by 200 units,by how much should net operating income increase?

Question

The following is Allison Corporation's contribution format income statement for last month:

The company has no beginning or ending inventories. The company produced and sold 10,000 units last month.
-If sales increase by 200 units,by how much should net operating income increase?

Quizplus · Accepted Answer

Selling price per unit = $800,000 F1F1F1S1F1F1F10 10,000 units = $80 per unit
Variable expense per unit = $300,000 F1F1F1S1F1F1F10 10,000 units = $30 per unit
Unit CM = $80 per unit - $30 per unit = $50 per unit
Change in net operating income = $50 per unit F1F1F1S1F1F1F10 200 units
= $10,000 increase

The Following Is Allison Corporation's Contribution Format Income Statement for Last