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Andreyy89
3 years ago
9

Last month when Holiday Creations, Inc., sold 37,000 units, total sales were $315,000, total variable expenses were $239,400, an

d fixed expenses were $39,000. Required: 1. What is the company’s contribution margin (CM) ratio? 2. What is the estimated change in the company’s net operating income if it can increase total sales by $1,100? (Do not round intermediate calculations.)
Business
1 answer:
gladu [14]3 years ago
6 0

Answer:

Explanation:

1. What is the company’s contribution margin (CM) ratio?

= sales - variable cost/ sales

= $315,000 - $239,400/$315,000

= $75,600/$315,000

= 0.24 x 100

= 24%

2. What is the estimated change in the company’s net operating income if it can increase total sales by $1,100?

Net operating income

= sales - variable cost - fixed cost

= $315,000 - $239,400 - $39,000

= $36,600

Change in operating income

= $316,100 - $239,400 - 39,000

= $37,700

Contribution margin ratio

= $316,600 - $239,400/316,600

= $77,200/$316,600

= 0.24 x 100

= 24%

Estimated change

=Change in total sales x CMR

= $1,100 x 24%

= $264

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2 years ago
It can be referred from the text that ...
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6 0
3 years ago
The following information is available for Splish Brothers Corp. for the year ended December 31, 2022. Other revenues and gains
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Answer:

Net Income    <u>  195,300</u>

Explanation:

The question is to prepare a  multi-step income statement

Splish Brothres Corp

Income Statement for the year ended December 31, 2022

Particulars/Description                               Amount ($)                    Amount ($)

Sales Calculation                                      

Sales Revenue                                                                                   747,000

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Sales Returns                                               9,000

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Net Sales                                                                                             734,800

Cost of Goods sold                                                                             (283,000)

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Operational Income                                                                             241,800

Other gains and revenue                         21,800

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Income before Income Taxes                                                              260,400

Income tax expense (25% x 260,400)                                              <u>   (65,100)</u>

Net Income                                                                                        <u>   195,300</u>

4 0
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