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Exercise 5-4 Computing and Using the CM Ratio [LO 5-3]

Last month when Holiday Creations, Inc., sold 38,000 units, total sales were $308,000, total variable expenses were $252,560, and fixed expenses were $36,200.

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 $2,300.