Check my w Olongapo Sports Corporation distributes two premium golf balls-Flight
ID: 2552398 • Letter: C
Question
Check my w 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 Flight Sure Tota Sales CM ratio s 320,800 1,eee,886 75% 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? 3. If sales increase by $42,000 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. K Prey 2 of 2 Net 0Explanation / Answer
1.
Contribution format income statement
2.
Breakeven point in dollar sales = Fixed costs / Contribution margin percentage
= 594,500 / 65.48%
= 907,911
3.
Increase in operating income = Increase in sales * Contribution margin ratio
= 42,000 * 65.48%
= 27,502
Flight Dynamic Flight Dynamic Sure shot Sure shot Total company Total company Amount % Amount % Amount % Sales 680,000 68 % 320,000 32 % 1,000,000 100 % Variable expenses 265,200 39 % 80,000 25 % 345,200 34.52 % Contribution margin 414,800 61 % 240,000 75 % 654,800 65.48 % Fixed expenses 594,500 Operating income 60,300