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

Last month when Holiday Creations, Inc., sold 41,000 units, total sales were $315,000, total variable expenses were $264,600, and fixed expenses were $35,500.

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.