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: Product Flight Dynamic $ 670,000 638 Sales CM ratio Fixed expenses total $589,000 per month. Sure Shot $ 330,000 74% Total $1,000,000 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 $52,000 a month, by how much would you expect the monthly net operating income to increase?

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: Product Flight Dynamic $ 670,000 638 Sales CM ratio Fixed expenses total $589,000 per month. Sure Shot $ 330,000 74% Total $1,000,000 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 $52,000 a month, by how much would you expect the monthly net operating income to increase?

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 18E

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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

Question

Please do not give image format

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.
Fixed expenses total $589,000 per month.
Product
Flight Dynamic
$ 670,000
63%
Sales
Contribution margin
Fixed expenses
Net operating income
Sure Shot
$ 330,000
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 $52,000 a month, by how much would you expect the monthly net operating income to increase?
Complete this question by entering your answers in the tabs below.
74%
Required 1 Required 2 Required 3
Prepare a contribution format income statement for the company as a whole. (Round your percentage answers to 2 decimal places
(.e. 0.1234 should be entered as 12.34).)
Total
$ 1,000,000
Flight Dynamic
Amount
$ 422,100
Total Company
%
Amount
%
Amount
%
$ 670,000 100.00 $ 330,000 100.00 $1,000,000 100.00
Sure Shot
63.00 $ 244,200
74.00
Required 2 >
666,300 17.00

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