Bowe Corporation\'s fixed monthly expenses are $21,500 and its contribution marg

Question

Bowe Corporation's fixed monthly expenses are $21,500 and its contribution margin ratio is 60%. 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 $75,000?

Bowe Corporation's fixed monthly expenses are $21,500 and its contribution margin ratio is 60%. 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 $75,000?

Explanation / Answer

Calculation of the Net Operating Income Sales 75000 Contribution Margin 60% 45000 Less: Fixed Expenses -21500 Net Operating Income 23500

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