Problem:
Last month when Holiday Creations, Inc., sold 39,000 units, total sales were $287,000, total variable expenses were $232,470, and fixed expenses were $39,200.
Required:
Question 1: What is the company's contribution margin (CM) ratio?
Question 2: Estimate the change in the company's net operating income if it were to increase its total sales by $2,500.
Note: Please show the work not just the answer.