Question

TB MC Qu. 6-63 Creswell Corporation's fixed monthly expenses ... Creswell Corporation's fixed monthly expenses are $23,000 and its contribution margin ratio is 63%. 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 $78,000

Answer 1

Net operating income= $26,140

Step-by-step explanation:

Giving the following information:

Fixed costs= $23,000

The contribution margin ratio is 63%.

Sales= $78,000

First, we need to calculate the contribution margin:

Contribution margin= contribution margin ratio*sales

Contribution margin= 0.63*78,000

Contribution margin= 49,140

Net operating income= 49,140 - 23,000= $26,140