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:

Required:

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.

Claimjumper Makeover Total Sales $ 94,000 $ 47,000 $ 141,000 Variable expenses 34,840 7,460 42,300 Contribution margin $ 59,160 $ 39,540 98,700 Fixed expenses 82,530 Net operating income $ 16,170

Explanation / Answer

The correct answer is :

Notes:

1. Total Break Even Sales Dollars =Fixed Cost / Contribution Margin Ratio

= $ 82,530 / 70%

= $ 117,900

2.

Contribution Margin Ratio = Total Contribution Margin /Total Sales

= $ 98,700 / $ 141,000 *100

= 70%

3.

Claimjumper Makeover Total Sales 78,600.00 39,300.00 117,900.00 Variable expenses 29,132.17 6,237.83 35,370.00 Contribution margin 49,467.83 33,062.17 82,530.00 Fixed expenses 82,530.00 Net operating income -   

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