Last month when Holiday Creations, Inc., sold 50,000 units, total sales were $200,000, total variable 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? 1 Contribution margin ratio 2 Estimated change in net operating income %
Last month when Holiday Creations, Inc., sold 50,000 units, total sales were $200,000, total variable 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? 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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![Homework.
5
Exercise 5-4 Computing and Using the CM Ratio [LO5-3]
Last month when Holiday Creations, Inc., sold 50,000 units, total sales were $200,000, total variable 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?
1 Contribution margin ratio
2 Estimated change in net operating income
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Transcribed Image Text:Homework.
5
Exercise 5-4 Computing and Using the CM Ratio [LO5-3]
Last month when Holiday Creations, Inc., sold 50,000 units, total sales were $200,000, total variable 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?
1 Contribution margin ratio
2 Estimated change in net operating income
< Prev
Search
2 of 6
Next >
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