Knoke Corporation’s contribution margin ratio is 29% and its fixed monthly expenses are $17,000. If the company’s sales for a month are $98,000, what is the best estimate of the company’s net operating income? Assume that the fixed monthly expenses do not change.

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Knoke Corporation’s contribution margin ratio is 29% and its fixed monthly expenses are $17,000. If the company’s sales for a month are $98,000, what is the best estimate of the company’s net operating income? Assume that the fixed monthly expenses do not change.

A. $81,000
B. $11,420
C. $52,580
D. $28,420

Answer: B

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