Question

Balonek Inc.'s contribution margin ratio is 57% and its fixed monthly expenses are $41,000. 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 $112,000

Answer 1

The estimated net operating income in a month is $22,840

Step-by-step explanation:

The computation of the net income is shown below:

= Contribution margin Ratio × Sales - Fixed cost

= 57% × $112,000 - $41,000

= $63,840 - $41,000

= $22,840

hence, the estimated net operating income in a month is $22,840

We simply applied the above formula so that the correct value could come

And, the same is to be considered