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 65 % 76 % ?
Fixed expenses total $556,000 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 $43,000 a month, by how much would you expect the monthly net operating income to increase?
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