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 $116,000 Makeover Total $ 58,000 7,700 $ 174,000 43,500 Sales Variable expenses 35,800 $ 80,200 $ 50,300 Contribution margin 130,500 Fixed expenses 86,850 $43,650 Net operating income 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the overall contribution margin (CM) ratio for the company?

Answer 1

1) Overall contribution margin = $130,500 / $174,000 = 75%

2) Overall breakeven sales = $86,850 / 75% = $115,800

	Claimjumper	Makeover	Total
Sales	$77,200	$38,600	$115,800
Variable expense	$23,826	$5,124	$28,950
Contribution margin	$53,374	$33,476	$86,850
Fixed expense			$86,850
Net operating income			$0