Question

Olongapo Sports Corporation distributes two premium golf balls—Flight Dynamic and Sure Shot. Monthly sales and the...

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 68 % 73 % ? Fixed expenses total $573,500 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 $59,000 a month, by how much would you expect the monthly net operating income to increase?

Homework Answers

Answer #1

Answer 1:

Flight Dynamic

Total Sales = $ 720,000

CM ratio = 68%

Variable cost ratio = 1 - 68% = 32%

Variable cost = $720,000 * 32% = $230,400

Sure Shot

Total Sales = $280,000

CM ratio = 73%

Variable cost ratio = 1 - 73% = 27%

Variable cost = $280,000 * 27% = $75,600

Answer 2:

Company's contribution ratio = Total contribution / Total sales = $694,000 / $1,000,000 = 69.4%

Company's break-even point in dollar sales based on the current sales mix = Fixed Expense / Company's contribution ratio

= $573,500 / 69.4%

= 826368.88

Company's break-even point in dollar sales = $826,368.88

Answer 3:

Assuming sales mix remaining constant:

Increase in monthly net operating income if Sales increase by $59,000 a month = Increase in sales * Company's contribution ratio

= $59,000 * 69.4%

= $40,946

Expected increase in monthly net operating income if Sales increase by $59,000 a month = $40,946

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Olongapo Sports Corporation distributes two premium golf balls—Flight Dynamic and Sure Shot. Monthly sales and the...
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?...
Olongapo Sports Corporation distributes two premium golf balls—Flight Dynamic and Sure Shot. Monthly sales and the...
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 $ 650,000 $ 350,000 $ 1,000,000 CM ratio 64 % 73 % ? Fixed expenses total $595,000 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?...
Olongapo Sports Corporation distributes two premium golf balls—Flight Dynamic and Sure Shot. Monthly sales and the...
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 $ 650,000 $ 350,000 $ 1,000,000 CM ratio 67 % 71 % ? Fixed expenses total $586,000 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?...
Olongapo Sports Corporation distributes two premium golf balls—Flight Dynamic and Sure Shot. Monthly sales and the...
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 $ 700,000 $ 300,000 $ 1,000,000 CM ratio 62 % 75 % ? Fixed expenses total $573,000 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?...
Olongapo Sports Corporation distributes two premium golf balls—Flight Dynamic and Sure Shot. Monthly sales and the...
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 $ 680,000 $ 320,000 $ 1,000,000 CM ratio 66 % 78 % ? Fixed expenses total $596,500 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?...
Olongapo Sports Corporation distributes two premium golf balls—Flight Dynamic and Sure Shot. Monthly sales and the...
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 $ 710,000 $ 290,000 $ 1,000,000 CM ratio 68 % 76 % ? Fixed expenses total $571,500 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?...
Olongapo Sports Corporation distributes two premium golf balls—the Flight Dynamic and the Sure Shot. Monthly sales...
Olongapo Sports Corporation distributes two premium golf balls—the Flight Dynamic and the Sure Shot. Monthly sales and the contribution margin ratios for the two products follow: Product Flight Dynamic Sure Shot Total Sales $670,000 $330,000 $1,000,000 CM ratio 66% 73% ? Fixed expenses total $585,000 per month. Required: 1. Prepare a contribution format income statement for the company as a whole. Round your percentage answers to 2 decimal places (i.e. .1234 is considered as 12.34). 2. Compute the break-even point...
Olongapo Sports Corporation distributes two premium golf balls—the Flight Dynamic and the Sure Shot. Monthly sales...
Olongapo Sports Corporation distributes two premium golf balls—the Flight Dynamic and the 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. Round your percentage answers to 2 decimal places (i.e. .1234 is considered as 12.34).       2. Compute...
Olongapo Sports Corporation distributes two premium golf balls—Flight Dynamic and Sure Shot. Monthly sales and the...
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 $ 690,000 $ 310,000 $ 1,000,000 CM ratio 60 % 80 % ? Fixed expenses total $593,000 per month. Required: 3. If sales increase by $50,000 a month, by how much would you expect the monthly net operating income to increase? Complete this question by entering your answers in...
Olongapo Sports Corporation distributes two premium golf balls—Flight Dynamic and Sure Shot. Monthly sales and the...
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 $ 660,000 $ 340,000 $ 1,000,000 CM ratio 61 % 77 % ? Fixed expenses total $594,500 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?...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT