Exercise 6-10 (Algo) Multiproduct Break-Even Analysis [LO6-9]

Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below:

ClaimjumperMakeoverTotalSales$ 116,000$ 58,000$ 174,000Variable expenses35,8007,70043,500Contribution margin$ 80,200$ 50,300130,500Fixed expenses 83,475Net operating income $ 47,025

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.