Question

If the contribution margin ratio for harrison company is 38%, sales were $425,000, and fixed costs were $100,000, what was the operating income?

Answer 1

The Harrison company operating income was $201,500. This conclusion was arrived at by subtracting fixed costs from sales, resulting in net sales of $325,000. 38% of net sales ($123,500) was subtracted for the final result, an operating income of $201,500.