Exercise - Computing and Using the CM Ratio
Last month when Holiday Creations, Inc., sold 36,000 units, total sales were $304,000, total variable expenses were $221,920, and fixed expenses were $36,100.
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 increase its total sales by $1200.