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 | $ | 98,000 | $ | 49,000 | $ | 147,000 |
| Variable expenses | 30,400 | 6,350 | 36,750 | |||
| Contribution margin | $ | 67,600 | $ | 42,650 | 110,250 | |
| Fixed expenses | 87,750 | |||||
| Net operating income | $ | 22,500 | ||||
1. 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.)
| Weighted Contribution margin rate: Total contribution/ Total sales *100 | ||||||
| 110250/147000 *100 = 75% | ||||||
| Break even Point in $: Fixed cost/ Weighted Contribution margin ratio *100 | ||||||
| 87750/ 75 *100 = 117000 | ||||||
| Sales mix of total product is 98:49 i.e. 2:1 | ||||||
| Hence, | ||||||
| Sales of two products at Break even is as follwos: | ||||||
| Product Claim Jumper: 117000 *2/3 = $78000 | ||||||
| Product Makeover: 117000*1/3 = $39000 | ||||||
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