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 | $ | 720,000 | $ | 280,000 | $ | 1,000,000 | |||
| CM ratio | 66 | % | 75 | % | ? | ||||
Fixed expenses total $577,500 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 $49,000 a month, by how much would you expect the monthly net operating income to increase?
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
Auditing And Assurance Services A Systematic Approach
Authors: William Messier, Steven Glover, Douglas Prawitt
12th Edition
1264100671, 978-1264100675
