Question: Exercise 3-4 Computing and Using the CM Ratio [LO3-3] Last month when Holiday Creations, Inc., sold 43,000 units, total sales were $314,000, total variable expenses

Exercise 3-4 Computing and Using the CM Ratio [LO3-3]

Last month when Holiday Creations, Inc., sold 43,000 units, total sales were $314,000, total variable expenses were $244,920, and fixed expenses were $36,900.

Required: 1. What is the companys contribution margin (CM) ratio?

2. Estimate the change in the companys net operating income if it were to increase its total sales by $1,100.

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