Question
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
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.
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