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 $53,500. If the company's sales for a month are $318,000, what is the best estimate of the company's net operating income? Assume that the fixed monthly expenses do not change.

$3,740

$207,260

$264,500

$57,240

Maack Corporation's contribution margin ratio is 18% and its fixed monthly expenses are $53,500. If the company's sales for a month are $318,000, what is the best estimate of the company's net operating income? Assume that the fixed monthly expenses do not change.

Explanation / Answer

Answer. $3740 Sales          318,000 Contribution Margin Ratio 18% Contribution ($318000 X 18%)            57,240 Less: Fixed Costs          (53,500) Net Operating Profit              3,740

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