Exercise 5-10 Compute the Break-Even Point for a Multiproduct Company [LO9]

Lucky Products markets two computer games: Predator and Runway. A contribution format income statement for a recent month for the two games appears below:

	Predator		Runway		Total
Sales	$	120,000	$	60,000	$	180,000
Variable expenses		44,200		9,800		54,000
Contribution margin	$	75,800	$	50,200		126,000
Fixed expenses						77,280
Net operating income					$	48,720

Required:
1.	Compute the overall contribution margin (CM) ratio for the company.

Overall CM ratio

%

2.	Compute the overall break-even point for the company in sales dollars. (Do not round intermediate calculation.)

Overall break-even point

$

3.

Complete the contribution format income statement at break-even point for the company showing the appropriate levels of sales for the two products. (Input all amounts as positive values except losses which should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to the nearest dollar amount.)

	Predator	Runway	Total
(Click to select)Fixed expensesVariable expensesContribution marginNet operating income (loss)Sales	$	$	$
(Click to select)Fixed expensesContribution marginVariable expensesSalesNet operating income (loss)
(Click to select)SalesVariable expensesContribution marginFixed expensesNet operating income (loss)	$	$
(Click to select)SalesNet operating income (loss)Contribution marginVariable expensesFixed expenses
(Click to select)SalesContribution marginNet operating income (loss)Variable expensesFixed expenses			$