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 | $ | 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?
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Fundamental Accounting Principles
Authors: Larson Kermit, Tilly Jensen
Volume I, 14th Canadian Edition
978-0071051507
