Question

how do you find the break-even point?

Exercise 6-12 Multiproduct Break-Even Analysis (LO6-9] 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 Product Sure Dynamic Shot $ 710,000 $ 290,000 63% 78% Sales CM ratio Total $1,000,000 ? Fixed expenses total $575,500 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the company's break-even point in dollar sales based on the current sales mix? (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) Break-even point in sales < Required 1 Required 3 >

Answer 1

Weighted average contribution margin ratio

= [(710,000*63%)+(290,000*78%)]/1,000,000

= 67.35%

Breakeven point in sales = Fixed cost/W contribution margin ratio

= 575,500/67.35%

= 854,491

Note : I have rounded some numbers. Comment if you face any issues