1. Prepare a contribution format income statement for the company as a whole. Carry computations 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?

1. Prepare a contribution format income statement for the company as a whole. Carry computations 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?

Accounting

27th Edition

ISBN:9781337272094

Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Chapter21: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 21.4CP: Break-even analysis Somerset Inc. has finished a new video game, Snowboard Challenge. Management is...

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EXERCISE 5–12 Multiproduct Break-Even Analysis [LO5–9]
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:

{picture11}

Fixed expenses total $183,750 per month.

Required:
1. Prepare a contribution format income statement for the company as a whole. Carry computations 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?

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