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	$	94,000	$	47,000	$	141,000
Variable expenses		23,560		4,640		28,200
Contribution margin	$	70,440	$	42,360		112,800
Fixed expenses						94,320
Net operating income					$	18,480

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 expensesSalesContribution marginNet operating income (loss)Variable expenses	$	$	$
(Click to select)Fixed expensesContribution marginVariable expensesSalesNet operating income (loss)
(Click to select)Contribution marginFixed expensesSalesNet operating income (loss)Variable expenses	$	$
(Click to select)SalesVariable expensesNet operating income (loss)Fixed expensesContribution margin
(Click to select)SalesNet operating income (loss)Variable expensesContribution marginFixed expenses			$