Asked on 20 Nov 2017

EXERCISE 5-12 Multiproduct Break-Even Analysis (L05-9] 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 $150,000 $250,000 80% 36% Total $400,000 Sales ......... CM ratio ....... Fixed expenses total $183,750 per month. Required: 1. Prepare a contribution format income statement for the company as a whole. Carry computa- tions to one decimal place. 2. Compute the break-even point for the company based on the current sales mix. 3. If sales increase by $100,000 a month, by how much would you expect net operating income to increase? What are your assumptions?

Answered on 20 Nov 2017

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