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Exercise 5-12 Multiproduct Break-Even Analysis [LO5-9] Olongapo Sports Corporation distributes two premium golf ballsFlight Dynamic...

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Accounting

Exercise 5-12 Multiproduct Break-Even Analysis [LO5-9]

Olongapo Sports Corporation distributes two premium golf ballsFlight Dynamic and Sure Shot. Monthly sales and the contribution margin ratios for the two products follow:

Product
Flight Dynamic Sure Shot Total
Sales $ 720,000 $ 280,000 $ 1,000,000
CM ratio 61 % 75 % ?

Fixed expenses total $564,000 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 $54,000 a month, by how much would you expect the monthly net operating income to increase?

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