Exercise 6-4 (Algo) Computing and Using the CM Ratio (LO6-3] Last month when Holiday Creations, Incorporated, sold 44,000 units, total sales were $176,000, total variable expenses were $135,520, and fixed expenses were $36,000. 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 sales volume by 675 units and total sales by $2,700? (Do not round intermediate calculations.) 1. Contribution margin ratio 2. Estimated change in net operating income
Exercise 6-4 (Algo) Computing and Using the CM Ratio (LO6-3] Last month when Holiday Creations, Incorporated, sold 44,000 units, total sales were $176,000, total variable expenses were $135,520, and fixed expenses were $36,000. 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 sales volume by 675 units and total sales by $2,700? (Do not round intermediate calculations.) 1. Contribution margin ratio 2. Estimated change in net operating income
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Exercise 6-4 (Algo) Computing and Using the CM Ratio (LO6-3]
Last month when Holiday Creations, Incorporated, sold 44,000 units, total sales were $176,000, total variable expenses were
$135,520, and fixed expenses were $36,000.
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 sales volume by 675 units and total sales by
$2,700? (Do not round intermediate calculations.)
1. Contribution margin ratio
2. Estimated change in net operating income
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4f9ab4d5-fd75-4b09-8c85-55b02c367958%2Ff506444d-0ca2-41d9-8f64-59843580aee4%2Fgjexte_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 6-4 (Algo) Computing and Using the CM Ratio (LO6-3]
Last month when Holiday Creations, Incorporated, sold 44,000 units, total sales were $176,000, total variable expenses were
$135,520, and fixed expenses were $36,000.
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 sales volume by 675 units and total sales by
$2,700? (Do not round intermediate calculations.)
1. Contribution margin ratio
2. Estimated change in net operating income
%
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