Question - Olongapo Sports Corporation is the distributor in the Philippines of two premium golf balls-the Flight Dynamic and the Sure Shot. Monthly sales, expressed in pesos (P), and the contribution margin ratios for the two products follow:
|
Product
|
|
|
Flight Dynamic
|
Sure Shot
|
Total
|
|
Sales
|
P 690,000
|
P 310,000
|
P 1,000,000
|
|
CM ratio
|
70%
|
72%
|
?
|
Fixed expenses total P573,500 per month.
Requirement 1: Prepare a contribution format income statement for the company as a whole.
Requirement 2: Compute the break-even point for the company based on the current sales mix.
Requirement 3: If sales increase by P41,000 a month, by how much would you expect net operating income to increase?