Question

Jilk Inc.'s contribution margin ratio is 60% and its fixed monthly expenses are $42.500. 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 $127.000? Mumple Choice оооо О ВА 500

Answer 1

Correct Answer:

Option: $    33,700.00

Working:

Sales revenue		$ 127,000.00
Less: variable cost (40% of sales revenue)	$ 50,800.00
Less: Fixed cost	$ 42,500.00
Total cost		$    93,300.00
Net operating income		$    33,700.00

Variable cost = 100% - 60% of sales revenue

= 40% of sales revenue

End of answer.

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