Maack Corporation\'s contribution margin ratio is 18% and its fixed monthly expe

Question

Maack Corporation's contribution margin ratio is 18% and its fixed monthly expenses are $52,000. If the company's sales for a month are $315,000, what is the best estimate of the company's net operating income? Assume that the fixed monthly expenses do not change.

$206,300

$4,700

$263,000

$56,700

Maack Corporation's contribution margin ratio is 18% and its fixed monthly expenses are $52,000. If the company's sales for a month are $315,000, what is the best estimate of the company's net operating income? Assume that the fixed monthly expenses do not change.

Explanation / Answer

Answer is $4700

Sales (A) $315,000 Contribution margin ratio (B) 18% Contribution margin (C)=(A*B) $56,700 Fixed expenses (D) $52,000 Net operating income (C) - (D) $4,700

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