Seyal Inc.'s contribution margin ratio is 55% and its fixed monthly expenses are $34,000. 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 $94,000?

Question

Quizplus · Accepted Answer

The contribution margin is calculated as 55% of $94,000, which is $51,700. Subtracting the fixed expenses of $34,000 from the contribution margin gives a net operating income of $17,700.

Seyal Inc'S Contribution Margin Ratio Is 55% and Its Fixed Monthly