Exercise 5-1 (Algo) Computing the CM Ratio and Variable Expense Ratio [LO5-1] Last month when Holiday Creations, Incorporated, sold 40,000 units, its sales, variable expenses, and fixed expenses were $160,000, $134,400, and $35,600, respectively. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the company's variable expense ratio? Note: Do not round intermediate calculations