Gary's Garage Company makes and installs garages to customers that need garages. Gary's Garage Company contribution margin ratio is 17% and its fixed monthly expenses are $46,000. If Gary's Garage Company's sales for a month are $303,000, what is the best estimate of Gary's Garage Company's net operating income? Assume that the fixed monthly expenses do not change.
Multiple Choice
$5,510
$205,490
$51,510
$257,000
contribution margin ratio=contribution margin/Sales
=(303,000*17%)=$51510
contribution margin-Fixed expenses=net operating income
net operating income=$51510-$46,000
=$5510.
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