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.