SND, Inc., had the following results for 2010: Prepare a new income statement for each of the following scenarios. Consider each scenario independently.
|
Total |
Per Unit |
|
|
Sales |
$2,000,000 |
$20.00 |
|
Variable expenses |
1,250,000 |
12.50 |
|
Contribution margin |
750,000 |
$ 7.50 |
|
Fixed expenses |
400,000 |
|
|
Operating income |
$ 350,000 |
Prepare a new income statement for each of the following scenarios. Consider each scenario independently.
Required
- Sales volume decreases by 10%.
- The sales price increases by 5%.
- Variable costs per unit increase by $1.50.
- The sales price decreases to $18, and an additional 5,000 units are sold.
- A new advertising campaign costing $75,000 increases sales volume by 15%.
- Variable costs per unit increase by $2.00, the sales price per unit increases by $1.50, sales volume decreases by 2,500 units, and fixed expenses increase by $20,000.