Exercise 5-4 Computing and Using the CM Ratio [LO5-3] Last month when Holiday Cr

Question

Exercise 5-4 Computing and Using the CM Ratio [LO5-3] Last month when Holiday Creations, Inc., .sold 44,000 units, total sales were $316,000, total variable expenses were $230,680, and fixed expenses were $36,300. Required: 1. What is the company's contribution margin (CM) ratio? 2 What is the estimated change in the company's net opereting income if it can increase total sales by $2.400? (Do not round intermediate calculetions.) 1Contibution margin ratio 2. Estimated change in net operating income

Explanation / Answer

Working:

Contribution margin ratio 27% Estimated change in net operating income $648

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