1. Ofarrell Corporation, a company that produces and sells a single product, has provided its contribution format income statement for March.

Sales (6,500 units) $442,000

Variable expenses 312,000

Contribution margin 130,000

Fixed expenses 103,500

Net operating income $26,500

If the company sells 6,400 units, its net operating income should be closest to:

$26,500

$25,979

$22,000

$24,500

2. Maack Corporation's contribution margin ratio is 18% and its fixed monthly expenses are $52,000. If the company's sales for a month are $315,000, what is the best estimate of the company's net operating income? Assume that the fixed monthly expenses do not change.

$206,300

$4,700

$263,000

$56,700

3. Arthur Corporation has a margin of safety percentage of 25% based on its actual sales. The break-even point is $346,800 and the variable expenses are 45% of sales. Given this information, the actual profit is: (Do not round your intermediate calculations.)

$92,480

$63,580

$17,340

$47,685