Exercise 5-12 (Static) Multiproduct Break-Even Analysis [LO5-9] Olongapo Sports Corporation distributes two premium golf balls-Flight Dynamic and Sure Shot. Monthly sales and the contribution margin ratios for the two products follow: Sales CM ratio Product Flight Dynamic $ 150,000 Fixed expenses total $183,750 per month, 80% Sure Shot $250,000 36% Total $ 400,000 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 $100,000 a month, by how much would you expect the monthly net operating income to increase?
Exercise 5-12 (Static) Multiproduct Break-Even Analysis [LO5-9] Olongapo Sports Corporation distributes two premium golf balls-Flight Dynamic and Sure Shot. Monthly sales and the contribution margin ratios for the two products follow: Sales CM ratio Product Flight Dynamic $ 150,000 Fixed expenses total $183,750 per month, 80% Sure Shot $250,000 36% Total $ 400,000 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 $100,000 a month, by how much would you expect the monthly net operating income to increase?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Exercise 5-12 (Static) Multiproduct Break-Even Analysis [LO5-9)
Olongapo Sports Corporation distributes two premium golf balls-Flight Dynamic and Sure Shot. Monthly sales and the contribution
margin ratios for the two products follow:
Sales
CM ratio
Product
Flight
Dynamic
$ 150,000
Fixed expenses total $183,750 per month.
80%
Sure Shot
$250,000
36%
Total
$400,000
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 $100,000 a month, by how much would you expect the monthly net operating income to increase?
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