Question

Lucido Products markets two computer games Claimuper and Makeover A contribution format income statement for a recent month for the two games appears below Sales Variable expenses Contribution margin Fixed expenses Net operating income Claimjumper $ 98,00 30.400 $67,660 Makeaver $49,000 6,150 $42,650 Total $147, cee 26,758 110,25e 14 825 $ 25,425 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

I need help with #3 please!

Answer 1

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	Contribution Income Statement
		Claimjumper	Makeover	Total
	Sales	$          75,400	$       37,700	$ 1,13,100
	Variable expenses	$          23,389	$         4,886	$     28,275
	Contribution Margin			$     84,825
	Fixed expenses			$     84,825
	Net Income (loss)			0
	Workings:
	Contribution margin ratio	=	Total Contribution / Total Sales
		=	$110250 / $147000
		=	75%
	Break-even point in dollars	=	Total Fixed costs /Contribution margin ratio
		=	$84825/ 75%
		=	$   1,13,100
			Claimjumper	Makeover	Total
(a)	Sales	=	$       98,000	$     49,000	$                     1,47,000
(b) = (a) / $147000	Ratio of sales to total sales	=	67%	33%
(c) = (b) X $113100	Allocated break - even sales	=	$       75,400	$     37,700	$                     1,13,100
(d)	Variable cost	=	$       30,400	$       6,350	$                         36,750
(e) = (d) / (a)	Ratio of variable cost to sales	=	31%	13%
(c) X (e)	Variable cost at break even	=	$       23,389	$       4,886	$                         28,275