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 67 % 80 % ? Fixed expenses total $593,000 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 $42,000 a month, by how much would you expect the monthly net operating income to increase?
Flight Dynamic Sure Shot Total Company Amount % Amount % Amount % Sales $ 720,000 75.00 X % $ 280,000 % 1,000,000 % Variable expenses 237,600 8.00 X % 56,000 % 293,600 % Contribution margin $ 482,400 67.00 % $ 224,000 0.00 % 706,400 0.00 % Fixed expenses 593,000 Net operating income $ 113,400
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