Maack Corporation's contribution margin ratio is 16% and its fixed monthly expenses are $44,000. If the company's sales for a month are $299,000, what is the best estimate of the company's net operating income? Assume that the fixed monthly expenses do not change.
A)$207,160
B)$3,840
C)$255,000
D)$47,840

Question

Quizplus · Accepted Answer

The contribution margin is calculated as 16% of $299,000, which is $47,840. Subtracting the fixed expenses of $44,000 from the contribution margin gives a net operating income of $3,840.

Maack Corporation's Contribution Margin Ratio Is 16% and Its Fixed