Exercise 6-4 Computing and Using the CM Ratio [LO6-3]

Last month when Holiday Creations, Inc., sold 41,000 units, total sales were $301,000, total variable expenses were $252,840, and fixed expenses were $35,900.

Required:

1. What is the companys contribution margin (CM) ratio?

2. What is the estimated change in the companys net operating income if it can increase total sales by $2,900? (Do not round intermediate calculations.)

1	Contribution margin ratio		%
2	Estimated change in net operating income		%