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Unformatted text preview: the impact on net operating income of any given dollar change in total sales can be computed by simply Definitions applying the CM ratio to the dollar change. For example, if Roddick Enterprises plans a $600 increase in sales during the coming month, the contribution margin will increase by $400 ($600 increase in sales × CM ratio of 66.7%). As we noted above, net operating income will also increase by $400. Assuming fixed cost remains unchanged....
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This note was uploaded on 04/21/2011 for the course ACTG 211 taught by Professor Galvan during the Spring '11 term at Finger Lakes Community College.
- Spring '11
- Managerial Accounting