Hi,I need help with the following problem.Thanks! A corporation's contribution margin ratio is 74% and its fixed monthly expenses are $42,000. Assume that the company's sales forNovember are expected to be $101,000.Required:Estimate the company's net operating income for September, assuming that the fixed monthly expenses do not change.Net operating income

Answered: A corporation's contribution margin…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Hi,

I need help with the following problem.

Thanks!

A corporation's contribution margin ratio is 74% and its fixed monthly expenses are $42,000. Assume that the company's sales for
November are expected to be $101,000.
Required:
Estimate the company's net operating income for September, assuming that the fixed monthly expenses do not change.
Net operating income

Expert Solution

Step 1 Introduction

The contribution margin is calculated as difference between sales and variable costs. The net income is calculated as difference contribution margin and fixed cost.

The break even sales are the sales where business earns no profit no loss during the period. The break even sales are calculated as fixed cost divided contribution margin ratio.

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