Olongapo Sports Corporation distributes two premium golf —Flight Dynamic and Sure Shot. Monthly sales and the contribution margin ratios for the two products follow: Product Total Flight Dynamic Sure Shot Sales $ 720,000 $ 280,000 $ 1,000,000 CM ratio 67% 72% ? Fixed expenses total $570,500 per month. 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 $48,000 a month, by how much would you expect the monthly net operating income to increase?
Olongapo Sports Corporation distributes two premium golf —Flight Dynamic and Sure Shot. Monthly sales and the contribution margin ratios for the two products follow: Product Total Flight Dynamic Sure Shot Sales $ 720,000 $ 280,000 $ 1,000,000 CM ratio 67% 72% ? Fixed expenses total $570,500 per month. 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 $48,000 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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Olongapo Sports Corporation distributes two premium golf —Flight Dynamic and Sure Shot. Monthly sales and the contribution margin ratios for the two products follow:
| Product | Total | ||
|---|---|---|---|
| Flight Dynamic | Sure Shot | ||
| Sales | $ 720,000 | $ 280,000 | $ 1,000,000 |
| CM ratio | 67% | 72% | ? |
Fixed expenses total $570,500 per month.
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 $48,000 a month, by how much would you expect the monthly net operating income to increase?
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