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Belmont Industries provides the following financial data for a given period: Sales Amount ($) Per Unit ($) 240,000 30 Less Variable Expenses 168,000 Contribution Margin Less Fixed Expenses 72,000 45,000 27,000 21 9 Net Income a. What is the company's CM ratio? b. If quarterly sales increase by $8,400 and there is no change in fixed expenses, by how much would you expect quarterly net operating income to increase?

Belmont Industries provides the following financial data for a given period: Sales Amount ($) Per Unit ($) 240,000 30 Less Variable Expenses 168,000 Contribution Margin Less Fixed Expenses 72,000 45,000 27,000 21 9 Net Income a. What is the company's CM ratio? b. If quarterly sales increase by $8,400 and there is no change in fixed expenses, by how much would you expect quarterly net operating income to increase?

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 87PSB
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Belmont Industries provides the following financial data for a given period: Sales Amount ($) Per Unit ($) 240,000 30 Less Variable Expenses 168,000 Contribution Margin Less Fixed Expenses 72,000 45,000 27,000 21 9 Net Income a. What is the company's CM ratio? b. If quarterly sales increase by $8,400 and there is no change in fixed expenses, by how much would you expect quarterly net operating income to increase?
Transcribed Image Text:Belmont Industries provides the following financial data for a given period: Sales Amount ($) Per Unit ($) 240,000 30 Less Variable Expenses 168,000 Contribution Margin Less Fixed Expenses 72,000 45,000 27,000 21 9 Net Income a. What is the company's CM ratio? b. If quarterly sales increase by $8,400 and there is no change in fixed expenses, by how much would you expect quarterly net operating income to increase?
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