Problem 4 (adapted)

Park Company markets two computer games: Ping and Pong. A contribution format

income statement for a recent month for the two games appears below:

Ping Pong Total

Sales P100,000 P50,000 P150,000

Variable

expenses 25,000 5,000 30,000

Contribution

margin P 75,000 P45,000 P120,000

Fixed

expenses 90,000

Net operating income P 30,000

Required:

1. Compute the overall contribution margin ratio.

2. Compute the overall break-even point for the company in sales pesos.

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.