Using a Contribution Format Income Statement
Porter Company’s, most recent contribution format income statement is shown below:
|Sales (30,000 units||$150,000||$5|
|Net operating income||$ 10,000|
Prepare a new contribution format income statement under each of the following conditions (consider each case independently):
- The number of units sold increases by 15%.
- The selling price decreases by 50 cents per unit, and the number of units sold increases by 20%.
- The selling price increases by 50 cents per unit, fixed expenses increase by $10,000, and the number of units sold decreases by 5%
- Variable expenses increase by 20 cents per unit, the selling price increases by 12%, and the number of units sold decreases by 10%
- Step 1 of 4
A contribution format income statement shows sales less variable expenses, which yields the contribution margin. The contribution margin less fixed expenses yields net operating inco . . .