Jilk 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 best estimate of the company's net operating income in a month when sales are $103,000?
A) $23,740
B) $59,740
C) $67,000
D) $7,260

Question

Quizplus · Accepted Answer

Profit = (CM ratio × Sales) - Fixed expenses
= (0.58 × $103,000) - $36,000
= $59,740 - $36,000
= $23,740

Jilk Inc'S Contribution Margin Ratio Is 58% and Its Fixed Monthly