Ask Question
8 June, 05:50

Bolding Inc.'s contribution margin ratio is 61% and its fixed monthly expenses are $47,500. 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 $137,000? a. $83,570b. $5,930c. $36,070d. $89,500

+5
Answers (1)
  1. 8 June, 09:12
    0
    c. $36,070

    Explanation:

    contribution margin ratio is the ratio of the contribution to sales of an entity for a given period.

    contribution margin ratio = contribution/sales

    where contribution is the difference between sales and the variable cost

    Given;

    sales = $137,000

    contribution margin ratio = 61% = 0.61

    0.61 = contribution/$137,000

    contribution = $137,000 * 0.61

    = $83,570

    Net operating income is the difference between the contribution and the fixed cost.

    Fixed cost = $47,500

    Net operating income = $83,570 - $47,500

    = $36,070
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Bolding Inc.'s contribution margin ratio is 61% and its fixed monthly expenses are $47,500. Assuming that the fixed monthly expenses do not ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers