Question
Okabee Enterprises is the distributor for two products, Model A100 and Model B900. Monthly sales and the contribution margin ratios for the two products follow:
Okabee Enterprises is the distributor for two products, Model A100 and Model B900. Monthly sales and the contribution margin ratios for the two products follow: |
Product | |||
Model A100 | Model B900 | Total | |
Sales | $690,000 | $310,000 | $1,000,000 |
Contribution margin ratio | 63% | 77% | ? |
The companys fixed expenses total $583,000 per month. |
Required: | |
1. | Prepare a contribution format income statement for the company as a whole. (Round your percentage answers to 2 decimal places. Input all amounts as positive values except losses which should be indicated by minus sign. Omit the "$" and "%" signs in your response.) |
Model A100 | Model B900 | Total Company | ||||
Amount | % | Amount | % | Amount | % | |
(Click to select)Net operating income (loss)Variable expensesContribution marginFixed expensesSales | $ | $ | $ | |||
(Click to select)Fixed expensesSalesContribution marginNet operating income (loss)Variable expenses | ||||||
(Click to select)SalesFixed expensesContribution marginNet operating income (loss)Variable expenses | $ | $ | ||||
(Click to select)Net operating income (loss)Contribution marginFixed expensesSalesVariable expenses | ||||||
(Click to select)Fixed expensesVariable expensesSalesNet operating income (loss)Contribution margin | $ | |||||
2. | Compute the break-even point in sales for the company based on the current sales mix. (Do not round intermediate calculations. Round your answer to the nearest dollar amount. Omit the "$" sign in your response.) |
Break-even point in sales | $ |
3. | If sales increase by $40,000 per month, by how much would you expect net operating income to increase? (Do not round intermediate calculations. Round your answer to the nearest dollar amount. Omit the "$" sign in your response.) |
Net operating income increases by | $ |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started