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 Sure Shot Total Sales ................................................. $150,000 $250,000 $400,000 CM ratio ........................................ 80% 36% ? Fixed expenses total $183,750 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 increase by $100,000 a month, by how much would you expect the monthly net operating income to increase? What are your assumptions?
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 Sure Shot Total Sales ................................................. $150,000 $250,000 $400,000 CM ratio ........................................ 80% 36% ?
Fixed expenses total $183,750 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 increase by $100,000 a month, by how much would you expect the monthly net operating income to increase? What are your assumptions?
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