Last month when Holiday Creations, Inc., sold 40,000 units, total sales were $310,000, total variable expenses were $220,100, and fixed expenses were $39,500.

Required:

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

Contribution margin ratio: __%

2. Estimate the change in the companys net operating income if it were to increase its total sales by $1,500.

Estimated change in net operating income: __