Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below:
|Net operating income||$||24,570|
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.
1.overall contribution margin ratio = overall contribution / sales
=>107,100 / 153,000
2.overall break even point in dollar sales = fixed costs / contribution margin ratio
=>$82,530 / 0.70
3.contribution format income statement at company's break even point;
|Sales (117,900*102,000/153,000) (117,900*51,000/153,000)||78,600||39,300||117,900|
|less; variable expenses (37,720*78,600/102,000) (8,180*39,000/51,000)`||29,067||6,303||35,370|
|less; fixed expenses||(82,530)|
|net operating income||nil|
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