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Calculate the company contribution margin ratio

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Reference no: EM133184451

Question - Blue Company sells a product for $250 each and the variable cost is $180 per unit. The monthly fixed expense is $1,650.

Required -

1. Calculate the company's contribution margin ratio.

2. Calculate the company's operating income if they sell 65 units next month.

3. Calculate the change to operating income if the company increases advertising by $550 in order to increase sales by $2,000. Is the change in operating income an increase or a decrease?

Reference no: EM133184451

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