Exercise 6-10 Multiproduct Break-Even Analysis (L06-9) 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 $112.000 34.600 $ 77,400 Sales Variable expenses Contribution margin Fixed expenses Het operating income Makeover $ 56,000 7.400 $48.600 Ook Total $ 160,000 42,000 126.000 8.250 $42.750 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 Complete this question by entering your answers in the tabs below Required 1 Required 2 Required 3 What is the overall contribution margin (CM) ratio for the company? Over CM Red Required 2 > ME Search or type URL 6 2 $ 4 3 % 5 6 & 7 8 9 W E R T Y U 1 0 S D F G H. J J K Z V B N. M . 26 command command Help 10 Problem 6-20 CVP Applications: Break-Even Analysis; Cost Structure; Target Sales (LO6-1, LO6-3, LO6 4. L06-5, L06-6, LO6-8) 0.83 points Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high totaling $15.00 per ball, of which 60% is direct labor cost Last year, the company sold 44,000 of these balls with the following results Sales 40.000 balls) $ 1.100.000 Contribution margin Fixed expenses het operating income 312.000 $ 133,000 fences Required: 1. Computea last year's CM ratio and the break-even point in balls, and the degree of operating leverage at last year's sales level 2. Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per bait. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in bals? 3. Refer to the data in (2) above the expected change in variable expenses takes place, how many balls will have to be sold next 4. Refer again to the data in 2) above. The president feels that the company must raise the selling price of its basketbals. Northwood Company wants to maintain the same CM ratio as last year is computed in requirement to what selling price per bal would slash variable expenses per ball by 40.00%, but it would cause food expenses per year to double the new plant is built what original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would be the company's new CM ratio and new break-even point in balls? all the new plant is built, how many balls will have to be sold next year to eam the same net operating income $123.000, as last year? b. Assume the new plant is built and that next year the company manufactures and sets 44,000 balls the same number as sold fast year). Prepare a contribution format income statement and compute the degree of operating leverage 2 3 6 7 8 W E R T Y U 1 0 S D F G H J K L N C V B V V N M 26 * command command