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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