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:

	Claimjumper				Makeover			Total
Sales	$	108,000			$	54,000		$	162,000
Variable expenses		26,920				5,480			32,400
Contribution margin	$	81,080			$	48,520			129,600
Fixed expenses									89,520
Net operating income								$	40,080

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.

Answer 1

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