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:
Required 1: | ||||||
FIGHT DYNAMIC | SURE SHOT | TOTAL COMPANY | ||||
AMOUNT | % | AMOUNT | % | AMOUNT | % | |
SALES | 690000 | 100 | 310000 | 100 | 1000000 | 100 |
VARIABLE EXPENSES | 213900 | 31 | 68200 | 22 | 282100 | 28 |
CONTRIBUTION MARGIN | 476100 | 69 | 241800 | 78 | 717900 | 72 |
FIXED EXPENSES | 578500 | |||||
NET OPERATING INCOME | 139400 | |||||
*CONTRIBUTION MARGIN(CM Ratio)% | (476100+241800)/1000000 = 72% | |||||
Required 2: | ||||||
Break even point = fixed cost/total CM Ratio | ||||||
i.e, = 578500/72% | ||||||
= 578500/.72 | ||||||
= $803472 | ||||||
Required 3: | ||||||
The additional contribution margin from the additional sales is computed as follows:$55,000 × 72% CM ratio = $39,600. Assuming no change in fixed expenses, all of this additional contribution margin of $39,600 should drop to the bottom line as increased net operating income. This answer assumes no change in selling prices, variable costs per unit, fixed expense, or 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 Sure Dynamic Shot $ 690,000 $ 310,000 68% 76% Sales CM ratio Total $ 1,000,000 ? Fixed expenses total $575,000 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...
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 $ 730,000 $ 270,000 62% 80% Sales CM ratio Total $1,000,000 Fixed expenses total $581,500 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...
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 69 % 78 % ? Fixed expenses total $559,500 per month. Required: 1. Prepare a contribution format income statement for the company as a whole Flight Dynamic Sure Shot Total Company Amount % Amount % Amount % Sales % % 0...
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 $750,000 $250,000 61% Total $1,000,000 Sales CM ratio 754 Fixed expenses total $588,500 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 $41,000...
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 $ 750,000 $ 250,000 64% 75% Sales CM ratio Total $1,000,000 ? Fixed expenses total $597,500 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...
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 $ 730,000 $ 270,000 661 Sales CM ratio Total $1,000,000 Fixed expenses total $577,000 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...
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 $ 690,000 $ 310,000 68% 76% Sales CM ratio Total $ 1,000,000 ? Fixed expenses total $575,000 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...
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 $740,000 Total Sales CM ratio $260,000 $1,000,000 72% 67% Fixed expenses total $569,000 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). Answer is complete but not entirely...
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 $ 660,000 $ 340,000 69% 72% Sales Total $1,000,000 Sales CM ratio Fixed expenses total $581,000 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...
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 $ 740,000 $ 260,000 $ 1,000,000 CM ratio 65 % 73 % ? Fixed expenses total $570,000 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?...