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:
Fixed expenses total P183,750 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 P100,000 a month, by how much would you expect net operating income to increase? What are yourassumptions?
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