Question

In: Accounting

Creswell Corporation's fixed monthly expenses are $29,000 and its contribution margin ratio is 56%. Assuming that...

Creswell Corporation's fixed monthly expenses are $29,000 and its contribution margin ratio is 56%. 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 $95,000?

Multiple Choice

  • $53,200

  • $66,000

  • $12,800

  • $24,200

Solutions

Expert Solution

Solution:
CALCULATION OF NET OPEREATING INCOME
Sales $                   95,000
Less: Variable Expenses (44%) $                   41,800
Contribution Margin (56%) $                   53,200
Less: Fixed Cost $                   29,000
Net Operating Income $                   24,200
Answer = Net Operating Income = Option 4 = $ 24,200

ekkarill92 answered 1 year ago
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