Bowe corporation's fixed monthly expenses are $21,000 and its contribution margin ratio is 61%. 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 $74,000

In finance and accounting, contribution margin is the product's price subtracted with the variable costs of production. Contribution margin ratio is when the contribution margin is divided by the sales.

61% = Contribution margin/$74,000

Contribution margin = $45,140

The net income is equal to the contribution margin subtracted with the fixed costs.

Net income = $45,140 - $21,000

Net income = $24,140