Question: Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: Claimjumper
Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below:
| Claimjumper | Makeover | Total | |||||||
| Sales | $ | 102,000 | $ | 51,000 | $ | 153,000 | |||
| Variable expenses | 31,600 | 6,650 | 38,250 | ||||||
| Contribution margin | $ | 70,400 | $ | 44,350 | 114,750 | ||||
| Fixed expenses | 87,525 | ||||||||
| Net operating income | $ | 27,225 | |||||||
Required:
1. What is the overall contribution margin (CM) ratio for the company?
2. What is the company's overall break-even point in dollar sales?
3. Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products.
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