http://ezto.mheducation.com/hm.tpx Edit View Favorites Tools Help a ESA 3rd Part
ID: 2538813 • Letter: H
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http://ezto.mheducation.com/hm.tpx Edit View Favorites Tools Help a ESA 3rd Party Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income MSN.com. Hotmail, Outi . O suggested Sites Outlook Web App 0 Notifications A, ADP e ESHI statement for a recent month for the two games appears below Ma Sales Variable expenses $ 104,000 32,200 52,000 156,000 39,000 6,800 Contribution margin Fixed expenses 71,800 $ 45,200117,000 84,150 Net operating income 32,850 Required: 1. Compute the overall contribution margin (CM) ratio for the company Il CM ratio 2. Compute the overall break-even point for the company in dollar sales. (Do not round intermediate calculations. Round your final answer to the nearest dollar amount.) break Complote the contribution format income statement at break-even point for the company showing the appropriate levels of sales for the two products. (Do not round internediate calculations. Round your final answers to the nearest dollar amount.) 3 Lucido Products Contribution Income Statement Claimjumper Makeover TotalExplanation / Answer
1. The over all contribution margin for the company will be 0.75 or 75 % which is computed as follows:-
( Sales-variable expenses)÷Sales ×100
(156,000-39,000)÷156,000×100
117,000÷157,000×100
0.75×100 = 75%.
2.For computing the overall break even point in sales for the company the below computations is adopted.
Break Even Point= Fixed cost÷ PV ratio.
Here PV ratio will be 75% which is derived by dividing the contribution with sales and then multiplying it with 100 I.e,(117,000÷156,000)×100
Therefore Break even point will be
Fixed cost ÷ PV ratio
84,150÷75% = 112,200.
3. Note :- could not complete this part due to the absence of information relating to fixed costs. Sorry and also I could find any basis in which it can be apportioned in the question.
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