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Shamrock Products markets two video games: Running and Skiing. A contribution format income statement for a recent month for the two games appears below: Sales $120,000 $40,000 $160,000 Variable expenses 55,000 M 72,000 Contribution margin 5 65,000 $23,000 88,000 Fixed expenses 41,250 Net operating income 5 46,750 Required: 1. Compute the overall contribution margin (CM) ratio for the company. 2. Compute the overall break-even point for the company in dollar sales . 3. Verify the overall break-even point for the company by constructing a contribution format income statement showing the appropriate levels of sales for the two products. [L09] Fill in the missing amounts in each of the four case situations below. Each case is independent of the others. (Hint: One way to nd the missing amounts would be to prepare a contribution format income statement for each case, enter the known data, and then compute the missing items.) Case Variable Contribution Fixed Net Operating Expenses Margin per Unit Expenses Income 20, 000 $300, 000 $220, 000 $45, 000 B 12,000 ? $120,000 $15 ? $18,000 Case Variable Average Contribution Fixed Net Operating Expenses Margin Ratio Expenses Income C $900, 000 40% $125, 000 D ? ? 45% $120,000 $37,500 Required: 1. Cases A and B assume that only one product is being sold. 2. Cases C and D assume that more than one product is being sold. Tralynna Products distributes two premium kid chairs-Hayden Recliner and Hadley Rocking. Monthly sales and the contribution margin ratios for the two products follow: Hayden Recliner Hadley Rocking Total Sales $600,000 $300,000 $900,000 CM ratio 75% 45% Fixed expenses total $360,750 per month. Required: 1. Prepare a contribution format income statement for the company as a whole. Carry computations to one decimal place. 2. What is the company's break-even point in dollar sales based on the current sales mix? 3. If sales increased by $120,000 a month, by how much would you expect the monthly net operating income to increase?Miller Company's contribution format income statement for the most recent month is shown below: m Sales (25,000 units) $450,000 $18.00 Variable expenses 250,000 10.00 Contribution margin $200,000 $ 8.00 Fixed expenses 85,000 Net operating income $115,000 Required: (Consider each case independently): 1. What is the revised net operating income if unit sales increase by 20%? 2. What is the revised net operating income if the selling price decreases by $2.00 per unit and the number of units sold increases by 15%? 3. What is the revised net operating income if the selling price increases by $2.00 per unit, xed expenses increase by $15,000, and the number of units sold decreases by 4%? 4. What is the revised net operating income if the selling price per unit increases by 10%, variable expenses increase by 80 cents per unit, and the number of units sold decreases by 8%
