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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
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 | $ | 112,000 | $ | 56,000 | $ | 168,000 | |||
Variable expenses | 27,880 | 5,720 | 33,600 | ||||||
Contribution margin | $ | 84,120 | $ | 50,280 | 134,400 | ||||
Fixed expenses | 89,760 | ||||||||
Net operating income | $ | 44,640 | |||||||
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.
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