The February contribution format income statement of Caines Corporation appears

Question

The February contribution format income statement of Caines Corporation appears below:

Sales

$ 259,200

Variable expenses

176,400

Contribution margin

82,800

Fixed expenses

59,100

Net operating income

$   23,700

If the company's sales increase by 18%, its net operating income should increase by about:

Answer

18%

197%

9%

63%

Please do not copy the answers previously given by others to this question. None of them match the possible answers or appear to be just guesses. Please provide supporting work for answer.

  

Sales

     

$ 259,200

     

Variable expenses

     

176,400

     

Contribution margin

     

82,800

     

Fixed expenses

     

59,100

     

Net operating income

     

$   23,700

  

Explanation / Answer

63%

new contribution margin = 82800*1.18

Net operating income = 82800*1.18-59100 = 38604

icrease in sale = (38604-23700)/23700 =63%

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.