Question
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
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 | $ | 660,000 | $ | 340,000 | $ | 1,000,000 | |||
CM ratio | 61 | % | 77 | % | ? | ||||
Fixed expenses total $594,500 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 $53,000 a month, by how much would you expect the monthly net operating income to increase?
- Required 1
Prepare a contribution format income statement for the company as a whole. (Round your percentage answers to 2 decimal places (i.e. 0.1234 should be entered as 12.34).)
|
- Required 2
What is the company's break-even point in dollar sales based on the current sales mix? (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)
|
- Required 3
If sales increase by $53,000 a month, by how much would you expect the monthly net operating income to increase? (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)
|
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