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Brightwood Furniture provides the following financial data for a given period: Sales Amount ($) Per Unit ($) 150,000 25 Less Variable Expenses 90,000 15 Contribution Margin 60,000 10 Less Fixed Expenses 35,000 - 25,000 Net Income a. What is the company's CM ratio? b. If quarterly sales increase by $5,200 and there is no change in fixed expenses, by how much would you expect quarterly net operating income to increase?

Brightwood Furniture provides the following financial data for a given period: Sales Amount ($) Per Unit ($) 150,000 25 Less Variable Expenses 90,000 15 Contribution Margin 60,000 10 Less Fixed Expenses 35,000 - 25,000 Net Income a. What is the company's CM ratio? b. If quarterly sales increase by $5,200 and there is no change in fixed expenses, by how much would you expect quarterly net operating income to increase?

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter6: Merchandising Transactions
Section: Chapter Questions
Problem 19Q: The following is select account information for Sunrise Motors. Sales: $256,400; Sales Returns and...
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What is the companys CM ratio?

Brightwood Furniture provides the following financial data for a given period: Sales Amount ($) Per Unit ($) 150,000 25 Less Variable Expenses 90,000 15 Contribution Margin 60,000 10 Less Fixed Expenses 35,000 - 25,000 Net Income a. What is the company's CM ratio? b. If quarterly sales increase by $5,200 and there is no change in fixed expenses, by how much would you expect quarterly net operating income to increase?
Transcribed Image Text:Brightwood Furniture provides the following financial data for a given period: Sales Amount ($) Per Unit ($) 150,000 25 Less Variable Expenses 90,000 15 Contribution Margin 60,000 10 Less Fixed Expenses 35,000 - 25,000 Net Income a. What is the company's CM ratio? b. If quarterly sales increase by $5,200 and there is no change in fixed expenses, by how much would you expect quarterly net operating income to increase?
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