Okabee Enterprises is the distributor for two products, Model A100 and Model B900. Monthly sales and the contribution margin ratios for the two products follow:
Product
Model A100 Model B900 Total
Sales $670,000 $330,000 $1,000,000
Contribution margin ratio 63% 73% ?
The company's fixed expenses total $597,000 per month.
Required:
1. Prepare a contribution format income statement for the company as a whole. (Round your percentage answers to 2 decimal places.)
2. Compute the break-even point in sales for the company based on the current sales mix. (Round your answer to the nearest whole dollar.)
3. If sales increase by $58,000 per month, by how much would you expect net operating income to increase?