Question

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 $ 720,000 $ 280,000 $ 1,000,000 CM ratio 61 % 71 % ? Fixed expenses total $565,500 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 $56,000 a month, by how much would you expect the monthly net operating income to increase?

Answer 1