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EXERCISE 2-4 Computing and Using the CM Ratio L02-3 Last month when Holiday Creations, Inc., sold 50,000 units, total sales were $200,000, total vari- able expenses were $120,000, and fixed expenses were $65,000. 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 $1,000? Callind Drice and Volume 102-4

EXERCISE 2-4 Computing and Using the CM Ratio L02-3 Last month when Holiday Creations, Inc., sold 50,000 units, total sales were $200,000, total vari- able expenses were $120,000, and fixed expenses were $65,000. 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 $1,000? Callind Drice and Volume 102-4

FINANCIAL ACCOUNTING
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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EXERCISE 2-4 Computing and Using the CM Ratio LO2-3 Last month when Holiday Creations, Inc., sold 50,000 units, total sales were $200,000, total vari- able expenses were $120,000, and fixed expenses were $65,000. Required: What is the company's contribution margin (CM) ratio? What is the estimated change in the company's net operating income if it can increase total sales by $1,000? 1. 2. Taoine Roont mo s of blo Cante Sallind Drice and Volume 102-4 W
Transcribed Image Text:EXERCISE 2-4 Computing and Using the CM Ratio LO2-3 Last month when Holiday Creations, Inc., sold 50,000 units, total sales were $200,000, total vari- able expenses were $120,000, and fixed expenses were $65,000. Required: What is the company's contribution margin (CM) ratio? What is the estimated change in the company's net operating income if it can increase total sales by $1,000? 1. 2. Taoine Roont mo s of blo Cante Sallind Drice and Volume 102-4 W
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