A company has the following financial information: Sales: $150,000 Variable Expenses: $90,000 Contribution Margin: $60,000 Fixed Expenses: $40,000 Net Income: $20,000 a. What is the company's contribution margin (CM) ratio? b. If quarterly sales increase by $6,000 and there is no change in fixed expenses, by how much would you expect quarterly net operating income to increase?

A company has the following financial information: Sales: $150,000 Variable Expenses: $90,000 Contribution Margin: $60,000 Fixed Expenses: $40,000 Net Income: $20,000 a. What is the company's contribution margin (CM) ratio? b. If quarterly sales increase by $6,000 and there is no change in fixed expenses, by how much would you expect quarterly net operating income to increase?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 23MC: If a firm has a contribution margin of $78M90 and a net income of $13,700 for the current month,...

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