Question

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 % % % 0 % $0 0.00 % $0 0.00 % 0 0.00 % Net operating income $0

Answer 1

Sales Variable expenses Contribution margin Fixed expenses Net operating income Flight Dynamic Sure Shot Amount Amount % $ 710,000 100.00% $ 290,000 100.00% $ 220,100 31.00% $ 63,800 22.00% $ 489,900 69.00% $ 226,200 78.00% Total Company Amount $ 1,000,000 100.00% $ 283,900 28.39% $ 716,100 71.61% $ 559,500 55.95% $ 156,600 15.66%