Introduction To Managerial Accounting
8th Edition
ISBN: 9781259917066
Author: BREWER, Peter C., Garrison, Ray H., Noreen, Eric W.
Publisher: Mcgraw-hill Education,
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Chapter 6, Problem 4E
Computing and Using the CM Ratio L06−3
Last month when Holiday Creations, Inc., sold 50,000 units, total sales were $200,000, total variable expenses mere $120,000, and fixed expenses were $65,000.
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 total sales by $1,000?
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Computing and Using the CM Ratio
Last month when Holiday Creations, Inc., sold 50,000 units, total sales were $200,000, total variable expenses were $120,000, and fixed expenses were $65,000.
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 total sales by $1,000?
EXERCISE: Computing and Using the CM Ratio,Last month when Holiday Creations, Inc., sold 50,000 units, total sales were $200,000, total variable expenses were $120,000, and fixed expenses were $65,000.Required:1. What is the company’s contribution margin (CM) ratio?2. Estimate the change in the company’s net operating income if it were to
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.
Chapter 6 Solutions
Introduction To Managerial Accounting
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