Question: Sales 120000 20 less variable expenses 72000 12 contribution margin 48000 8 less fixed expenses net income 30000 net income 18000 a. What is the company s CM ratio? b. If quarterly sales increase by $4,800 and there is no change in fixed expenses, by how much would you expect quarterly net operating income to increase?
Question: Sales 120000 20 less variable expenses 72000 12 contribution margin 48000 8 less fixed expenses net income 30000 net income 18000 a. What is the company s CM ratio? b. If quarterly sales increase by $4,800 and there is no change in fixed expenses, by how much would you expect quarterly net operating income to increase?
Chapter4A: Nopat Breakeven: Revenues Needed To Cover Total Operating Costs
Section: Chapter Questions
Problem 1EP
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Transcribed Image Text:Question:
Sales
120000 20
less variable expenses
72000 12
contribution margin
48000 8
less fixed expenses net income 30000
net income
18000
a. What is the company s CM ratio?
b. If quarterly sales increase by $4,800 and there is no change in fixed
expenses, by how much would you expect quarterly net operating
income to increase?
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