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View Full Version : Calculating net operating income


mujer
Aug 12, 2012, 05:49 PM
here's the problem
the management of reagon corporation expects sales in January to be $ 122,000 the contribution margin ratio is 69% and its fixed monthly expenses are $ 50,000
I need to figure out
Estimate the company's net income for January assuming that fixed monthly expenses do not change

I know the formula is total sales- total variable costs-fixed costs
but I can't figure out the variable costs

paraclete
Aug 12, 2012, 06:11 PM
what fooled by a different description? Variable expenses are those which are in proportion to volume

so sales*contribution margin-fixed expenses is the same as your equation in this example