Olongapo Sports Corporation distributes two premium golf balls-the Flight Dynami
ID: 2402222 • Letter: O
Question
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 Total Sales CM ratio $730,000 $270,000 $1,000,000 61% 77% Fixed expenses total $568,500 per month. Required 1. Prepare a contribution format income statement for the company as a whole. Round your percentage answers to 2 decimal places (i.e. .1234 is considered as 12.34) Olongapo Sports Corporation Flight Dynamic Sure Shot Total Company Amount Amount AmountExplanation / Answer
Answers
Working #1
Working
Flight Dynamic
Sure Shot
A
Sales
$ 730,000.00
$ 270,000.00
B
CM Ratio
61%
77%
C= A x B
Contribution Margin
$ 445,300.00
$ 207,900.00
D = A - C
Variable cost
$ 284,700.00
$ 62,100.00
Requirement #1
Working
Flight Dynamics
Sure Shot
Total Company
A
Sales Revenue
$ 730,000.00
100.00%
$ 270,000.00
100.00%
$ 1,000,000.00
100.00%
B [Working #1]
Variable cost
$ 284,700.00
39.00%
$ 62,100.00
23.00%
$ 346,800.00
34.68%
C = A - B [or Working #1]
Contribution margin
$ 445,300.00
61.00%
$ 207,900.00
77.00%
$ 653,200.00
65.32%
D
Fixed expenses
$ 568,500.00
E=C-D
Net Income
$ 84,700.00
Working #2
Sales:
A
Flight Dynamic
$ 730,000.00
B
Sure Shot
$ 270,000.00
C=A+B
Total Sales
$ 1,000,000.00
Sales Mix:
D = (A/C) x 100
Flight Dynamic
73.00%
E = (B/C) x 100
Sure Shot
27.00%
Working #3
Flight Dynamic
Sure Shot
TOTAL
A
Sales Mix % [Working #2]
73.00%
27.00%
100.00%
B
CM Ratio
61.00%
77.00%
C=A x B
Weighted Average CM ratio
44.53%
20.79%
65.32%
Requirement #2
A
Total Fixed Cost
$ 568,500.00
B
Weighted Average CM ratio
65.32%
C=A/B
Break Even point in Sales
$ 870,331
Requirement #3
A
Increase in Sales
$ 43,000.00
B
Weighted Average CM ratio
65.32%
C=A x B
Net Operating Income increases by
$ 28,088
Working #1
Working
Flight Dynamic
Sure Shot
A
Sales
$ 730,000.00
$ 270,000.00
B
CM Ratio
61%
77%
C= A x B
Contribution Margin
$ 445,300.00
$ 207,900.00
D = A - C
Variable cost
$ 284,700.00
$ 62,100.00
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