Question

Chapter 2 Oraded Homework Graded Homework Saved Help Save 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 Sure Dynamic Shot $ 720,000 $ 280,000 628 778 Total $1,000,000 7 CN ratio Fixed expenses total $557,000 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? 3. If sales increase by $46,000 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. Required 1 Required 2 Required 3 Prepare a contribution format income statement for the company as a whole. (Round your percentage answers to 2 decimal places (.e. 0.1234 should be entered as 12.34).) Flight Dynamic Amount % Sure Shot Amount % Total Company Amount % , $ 0 0.00% S 0 0.00% < Prev 8 of 9 !!! Next >

Answer 1

Requirement: 1 Sales Variable expenses Contribution margin Fixed expenses Net operating income Flight Dynamic Amount % 720000 100.00% 273600 38.00% 446400 62.00% Sure shot Amount % 280000 100.00% 64400 23.00% 215600 77.00% Total Company Amount % 1000000 100.00% 338000 33.80% 662000 66.20% 557000 105000

Requirement: 2 Fixed expenses 557000 Dollar sales to break even Overall CM Ratio 66.20% = | Break even point (Dollars) 841390 Requirement: 3 Increase sales 46000 CM Ratio 66.20% = Operating income to increase 30452