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	$	114,000			$	57,000		$	171,000
Variable expenses		42,040				9,260			51,300
Contribution margin	$	71,960			$	47,740			119,700
Fixed expenses									80,220
Net operating income								$	39,480

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.