Lucido Products markets two computer games: Claimjumper and Makeover. A contribu

Question

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

Compute the overall contribution margin (CM) ratio for the company.

      

Compute the overall break-even point for the company in dollar sales. (Do not round intermediate calculations. Round your answer to the nearest dollar amount.)

      

Complete 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 intermediate calculations. Round your answers to the nearest dollar amount.)

     

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

Explanation / Answer

Answer:- 1)-The overall contribution margin (CM) ratio for the company:-

=(Total contribution margin/Total sales)*100

=($115200/$144000)*100 =80%

2)- The overall break-even point for the company in dollar sales:-

=Total Fixed expenses/ overall contribution margin (CM) ratio

=$89280/80% = $111600

3)-

Contribution Format income statement Particulars Claimjumper Makeover Total $ $ $ Original dollar Sales 96000 48000 144000 Sales at break even 111600*66.6667%=74400 111600*33.33333%=37200 111600 Particulars Claimjumper Makeover Total $ $ $ Sales 74400 37200 111600 Less:- Variable expenses (24040/96000)*74400 =18631 (4760/48000)*37200 =3689 22320 Contrbution margin 89280 Less:- Fixed expenses 89280 Net Opreating income NIL

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