Last month when Holiday Creations, Inc., sold 42,000 units, total sales were $168,000, total variable expenses were $137,760, and fixed expenses were $36,600. 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 sales volume by 450 units? (Do not round intermediate calculations.)
Last month when Holiday Creations, Inc., sold 42,000 units, total sales were $168,000, total variable expenses were $137,760, and fixed expenses were $36,600. 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 sales volume by 450 units? (Do not round intermediate calculations.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![Exercise 5-4 (Algo) Computing and Using the CM Ratio [LO5-3]
Last month when Holiday Creations, Inc., sold 42,000 units, total sales were $168,000, total variable expenses were $137,760, and
fixed expenses were $36,600.
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 sales volume by 450 units? (Do not round
intermediate calculations.)
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Transcribed Image Text:Exercise 5-4 (Algo) Computing and Using the CM Ratio [LO5-3]
Last month when Holiday Creations, Inc., sold 42,000 units, total sales were $168,000, total variable expenses were $137,760, and
fixed expenses were $36,600.
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 sales volume by 450 units? (Do not round
intermediate calculations.)
Return to ques
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