Scobie Corporation's Fixed Monthly Expenses Are $16,000 and Its Contribution

question 96

Multiple Choice

Scobie Corporation's fixed monthly expenses are $16,000 and its contribution margin ratio is 57%. 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 $69,000?

• A) $39,330
• B) $23,330
• C) $13,670
• D) $53,000

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Definitions:

Railroads

Land transport routes using a series of tracks and stations for the movement of trains to transport passengers and goods.

Industrial Regulation

Governmental regulation of industries to ensure competition, control prices, prevent monopolies, and protect consumers.

Social Regulation

A form of government intervention in the private sector that aims to protect public welfare, health, safety, and the environment.

Costs Of Production

The total expenses incurred by a company to manufacture a product or provide a service, including materials, labor, and overhead.