Exercise 2-4 (Algo) Computing and Using the CM Ratio [LO2-3] Last month when Holiday Creations, Inc., sold 40,000 units, total sales were $283,000, total variable expenses were $206,590, and fixed expenses were $38,600. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase total sales by $1,900? (Do not round intermediate calculations.). 1. Contribution margin ratio Estimated change in net operating 2. income
Exercise 2-4 (Algo) Computing and Using the CM Ratio [LO2-3] Last month when Holiday Creations, Inc., sold 40,000 units, total sales were $283,000, total variable expenses were $206,590, and fixed expenses were $38,600. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase total sales by $1,900? (Do not round intermediate calculations.). 1. Contribution margin ratio Estimated change in net operating 2. income
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![Exercise 2-4 (Algo) Computing and Using the CM Ratio [LO2-3]
Last month when Holiday Creations, Inc., sold 40,000 units, total sales were $283,000, total variable expenses were $206,590, and
fixed expenses were $38,600.
Required:
1. What is the company's contribution margin (CM) ratio?
2. What is the estimated change in the company's net operating income if it can increase total sales by $1,900? (Do not round
intermediate calculations.).
1. Contribution margin ratio
Estimated change in net operating
2.
income](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F56b4ba7c-34ae-43ff-834e-480ccbca74de%2F9adb3686-dd95-42af-bbbb-b6bb4ef3a90d%2Fnb2crh_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 2-4 (Algo) Computing and Using the CM Ratio [LO2-3]
Last month when Holiday Creations, Inc., sold 40,000 units, total sales were $283,000, total variable expenses were $206,590, and
fixed expenses were $38,600.
Required:
1. What is the company's contribution margin (CM) ratio?
2. What is the estimated change in the company's net operating income if it can increase total sales by $1,900? (Do not round
intermediate calculations.).
1. Contribution margin ratio
Estimated change in net operating
2.
income
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