Exercise 6-12 Multiproduct Break-Even Analysis [LO6-9]

Olongapo Sports Corporation distributes two premium golf ballsFlight Dynamic and Sure Shot. Monthly sales and the contribution margin ratios for the two products follow:

	Product
	Flight Dynamic			Sure Shot			Total
Sales	$	150,000		$	250,000		$	400,000
CM ratio		80	%		36	%		?

Fixed expenses total $183,750 per month.

Required:

1. Prepare a contribution format income statement for the company as a whole.

2. What is the company's break-even point in dollar sales based on the current sales mix?

3. If sales increase by $100,000 a month, by how much would you expect the monthly net operating income to increase?