Exercise 5-10 Multiproduct Break-Even Analysis [LO5-9]Lucido Products markets two computer games: Claimjumper andMakeover. A...Exercise...

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Accounting

Exercise 5-10 Multiproduct Break-Even Analysis [LO5-9]
Lucido Products markets two computer games: Claimjumper andMakeover. A contribution format income statement for a recent monthfor the two games appears below:
Claimjumper Makeover Total
Sales $ 114,000 $ 57,000 $ 171,000
Variable expenses 42,040 9,260 51,300
Contribution margin $ 71,960 $ 47,740 119,700
Fixed expenses 80,220
Net operating income $ 39,480
Required:
1. What is the overall contribution margin (CM) ratio for thecompany?
2. What is the company's overall break-even point in dollarsales?
3. Prepare a contribution format income statement at thecompany's break-even point that shows the appropriate levels ofsales for the two products.

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4.5 Ratings (871 Votes)

1 Overall Contribution margin Ratio Total contribution margintotal sale 119700171000 07 ie 70 2 calculation of the overall break even point for the company in See Answer

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In: AccountingExercise 5-10 Multiproduct Break-Even Analysis [LO5-9]Lucido Products markets two computer games: Claimjumper andMakeover. A...Exercise 5-10 Multiproduct Break-Even Analysis [LO5-9]Lucido Products markets two computer games: Claimjumper andMakeover. A contribution format income statement for a recent monthfor the two games appears below:ClaimjumperMakeoverTotalSales$114,000$57,000$171,000Variable expenses42,0409,26051,300Contribution margin$71,960$47,740119,700Fixed expenses80,220Net operating income$39,480Required:1. What is the overall contribution margin (CM) ratio for thecompany?2. What is the company's overall break-even point in dollarsales?3. Prepare a contribution format income statement at thecompany's break-even point that shows the appropriate levels ofsales for the two products.

	Claimjumper		Makeover		Total
Sales	$	114,000	$	57,000	$	171,000
Variable expenses		42,040		9,260		51,300
Contribution margin	$	71,960	$	47,740		119,700
Fixed expenses						80,220
Net operating income					$	39,480