Question

Jam J Inc.'s contribution margin ratio is 58% and its fixed monthly expenses are $36,000. Assuming that the fixed monthly expenses do not change, what is the company's net operating income in a month when sales are $103,000?

Answer 1

the net operating income is $23,740

Step-by-step explanation:

The computation of the company net operating income is shown below:

As we know that

Sales $103,000

Less: Variable cost -$43,260 ($103,000 × 0.58)

Contribution margin $59,740 ($103,000 × 0.58)

Less: Fixed cost -$36,000

Net operating income $23,740

hence, the net operating income is $23,740