Exercise 5-10 Multiproduct Break-Even Analysis [LO5-9]

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	$	106,000			$	53,000		$	159,000
Variable expenses		32,800				6,950			39,750
Contribution margin	$	73,200			$	46,050			119,250
Fixed expenses									84,600
Net operating income								$	34,650

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.