Reference no: EM133006496

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                Makeover                  Total
Sales                          $ 120,000                  $ 60,000               $ 180,000
Variable expenses             37,000                     8,000                     45,000
Contribution margin            $ 83,000                $ 52,000                   135,000
Fixed expenses 85,275
Net operating income $ 49,725

Required:

Problem 1. What is the overall contribution margin (CM) ratio for the company?

Problem 2. What is the company's overall break-even point in dollar sales?

Problem 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.