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 

required. 

Compute the overall contribution margin (CM) ratio for the company 

Compute the overall break-even point for the company in dollar sales.

Complete the contribution format income statement at break-even point for the company showing the appropriate levels of sales for the two products. 

Answer 1

Answer:- 1)-The overall contribution margin (CM) ratio for the company:-

=(Total contribution margin/Total sales)*100

=($134400/$168000)*100 =80%

2)- The overall break-even point for the company in dollar sales:-

=Total Fixed expenses/ overall contribution margin (CM) ratio

=$90960/80% = $113700

3)-

Contribution Format income statement
Particulars	Claimjumper	Makeover	Total
	$	$	$
Original dollar Sales	112000	56000	168000
Sales at break even	113700*66.6667%=75800	113700*33.33333%=37900	113700
Particulars	Claimjumper	Makeover	Total
	$	$	$
Sales	75800	37900	113700
Less:- Variable expenses	(27880/112000)*75800 =18869	(5720/56000)*37900 =3871	22740
Contrbution margin			90960
Less:- Fixed expenses			90960
Net Opreating income			NIL