Last month when Holiday Creations, Inc., sold 41,000 units, total sales were $302,000, total variable expenses were $256,700, andfixed expenses were $36,900.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 $2,500? (Do nòt roundintermediate calculations.)1. Contribution margin ratio%2. Estimated change in net operating income

Contribution Margin Ratio is percentage difference between corporate revenues and variable costs.…

Answered: ixed expenses were $36,900. Required:…

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 38,000 units, total sales were $152,000, total variable expenses were $112,480, and fixed expenses were $38,900. 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 500 units and total sales by $2,000? (Do not round intermediate calculations.)
2. Last month when Pantok Creations Inc. sold 40,000 units, total sales were P300,000, total variable expenses were P240,000, and fixed expenses were P45,000. Required: a. What is the company's contribution margin (CM)s ratio? b. Estimate the change in the company's net operating income if it were to increase its total sales by P1,500.
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ixed expenses were $36,900. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating intermediate calculations.)