Problem: 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 $30,000 $70,000 $100,000
Less variable expenses 20,000 50,000 70,000
Contribution margin $10,000 $20,000 30,000
Less fixed expenses 24,000
Net operating income $6,000
Required:
1. Compute the overall contribution margin (CM) ratio for the company
2. Compute the overall break-even point for the company in sales dollars.
3. Verify the overall break-even point for the company by constructing a contribution format income statement showing the appropriate levels of sales for the two products.