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Myron Johnson
on Oct 11, 2024

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Jilk Inc.'s contribution margin ratio is 58% and its fixed monthly expenses are $36,000.Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $103,000?

A) $23,740
B) $59,740
C) $67,000
D) $7,260

Contribution Margin Ratio

The percentage of each sales dollar that remains after variable costs are subtracted, indicating the portion contributing to covering fixed costs and generating profit.

Fixed Monthly Expenses

Recurring costs that do not vary in amount and are paid on a monthly basis, such as rent or loan payments.

Net Operating Income

Earnings from a company's core business operations, excluding deductions for interest and taxes.

  • Calculate the gross operating profit after considering variations in sales volume, expenses, and shifts in sales methodologies.
  • Implement the concept of the contribution margin ratio for the assessment of business performance.
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Sarah HernandezOct 12, 2024
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