Question

Exercise 5-10 Multiproduct Break-Even Analysis [LO5-9] 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 $ 114,000 42,040 Makeover Total Sales Variable expenses 57,000 171,000 9,260 51,300 $ 71,960 Contribution margin 47,740 119,700 Fixed expenses 82,530 $ 37,170 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? Overall CM ratio Required 2 Required 1

Answer 1

Sales Varaibles Expense contribution Margin Fixed Expense Net operating Margin Date ClaimJumpers Make over Totals 114000 57000 171000 42040 9260 51300 71960 47740 1 19700 825301 37170 1. Overall Contribution Margin of the Company = Total Contribution Margin / total Sales = 119700/171000 70% 2. Overall Break Even poin in dollar Sales = Fixed Cost / CM Ratio = 82530/70% 117900

Contribution Margin income Statement at the Companies Break Even point ClaimJumpers Make over Totals Sales 7860039300117900 Varaibles Expense 28985 6385 35370 contribution Margin 49615 3 2915 82530 Fixed Expense 82530 Net operating Margin 01 Sales MixRatio=Division Sales / Total sales Variable Cost ratio Sales = Total Sales* Sales mix Ratio Variable cost = sales *VC Ratio ClaimJumpers Make over 0.666666667 0.33333333 0.36877193 0.16245614 78600 39300 28985.47368 6384.52632