Bolding Inc.\'s contribution margin ratio is 60% and its fixed monthly expenses

Question

Bolding Inc.'s contribution margin ratio is 60% and its fixed monthly expenses are $47,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $136,000?

$81,600

$7,400

$34,600

$89,000

Bolding Inc.'s contribution margin ratio is 60% and its fixed monthly expenses are $47,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $136,000?

Explanation / Answer

ans is $34600

total sales =$136000

contribution=60%

so $136000*60%

=81600

or sales- variable cost=81600

less fixed cost=47000

so net operating income=81600-47000

or$34600

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