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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 | Total | ||
---|---|---|---|
Flight Dynamic | Sure Shot | ||
Sales | $ 680,000 | $ 320,000 | $ 1,000,000 |
CM ratio | 69% | 71% | ? |
Fixed expenses total $582,500 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 $44,000 a month, by how much would you expect the monthly net operating income to increase?
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