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Compute overall contribution margin ratio for park company

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Reference no: EM132620491

Park Company markets two computer games: Ping and Pong. A contribution format income statement for a recent month for the two games appears below:

                                            Ping              Pong               Total

Sales                        P100,000       P50,000            P150,000

Variable expenses        25,000            5,000            30,000

Contribution margin       P 75,000          P45,000              P120,000

Fixed expenses 90,000

Net operating income P 30,000

Required:

Question 1. Compute the overall contribution margin ratio.

Question 2. Compute the overall break-even point for the company in sales pesos.

Question 3. Verify the overall break-even point for the company by constructing a contribution format income statement showing the appropriate levels of sales for the two products.

Reference no: EM132620491

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