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Lucido Products markets two computer games: Claimjumper and Makeover. A contribution margin income statement for a recent month for the two games appears as follows:
Lucido Products markets two computer games: Claimjumper and Makeover. A contribution margin income statement for a recent month for the two games appears as follows:
Claimjumper | Makeover | Total | |||||||
Sales | $ | 65,000 | $ | 85,000 | $ | 150,000 | |||
Less: Variable expenses | 45,000 | 60,000 | 105,000 | ||||||
Contribution margin | $ | 20,000 | $ | 25,000 | 45,000 | ||||
Less: Fixed expenses | 36,000 | ||||||||
Net income | $ | 9,000 | |||||||
Required:
1. Compute the overall CM ratio for the company.
2. Compute the overall break-even point for the company in sales dollars.
3. Calculate the overall break-even point for the company by constructing an income statement showing the appropriate levels of sales for the two products.
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