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Last month when Holiday Creations, Incorporated, sold 42,000 units, total sales were $168,000, total variable expenses were $122,640, 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 %

Last month when Holiday Creations, Incorporated, sold 42,000 units, total sales were $168,000, total variable expenses were $122,640, 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 %

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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Last month when Holiday Creations, Incorporated, sold 42,000 units, total sales were $168,000, total variable expenses were $122,640, 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 %
Transcribed Image Text:Last month when Holiday Creations, Incorporated, sold 42,000 units, total sales were $168,000, total variable expenses were $122,640, 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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