Question

Creswell Corporation's fixed monthly expenses are $26,000 and its contribution margin ratio is 60%. 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 $84,000

Answer 1

See below

Step-by-step explanation:

The company's net operating income would be;

= fixed expenses / Contribution margin ratio

= $26,000/60%

= $43,333