Reference no: EM132621056
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:
Problem 1. Compute the overall contribution margin ratio.
Problem 2. Compute the overall break-even point for the company in sales pesos.
Problem 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.