Question: Total Per Unit Sales $ 120,000 $ 20 Less: Variable expenses 72,000 12 Contribution margin 48,000 $ 8 Less: Fixed expenses 30,000 Net operating income

Total Per Unit Sales $ 120,000 $ 20 Less: Variable expenses 72,000 12 Contribution margin 48,000 $ 8 Less: Fixed expenses 30,000 Net operating income $ 18,000

What is the companys CM ratio? If quarterly sales increase by $4,800 and there is no change in fixed expenses, by how much would you expect quarterly net operating income to increase? (Do not prepare an income statement; use the CM ratio to compute your answer.)

CM ratio % Increased net income

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