Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recentmonth for the two games appears below.SalesVariable expensesContribution marginFixed expensesNet operating incomeClaimjumper$ 112,00034,600$77,400Makeover$ 56,0007,400$ 48,600Total$ 168,00042,000126,00086,400$ 39,600Required: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 forthe two products.Answer is complete but not entirely correct.Complete this question by entering your answers in the tabs below.Required 11 Required 21 Required 3Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of salesfor the two products. (Do not round intermediate calculations, Round your answers to the nearest dollar amount.)

Lets understand the basics.The break-even sales represent the sales where there is neither profit…

Answered: Lucido Products markets two computer…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Contribution Margin Review the contribution margin income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statements. Complete the following table from the data provided on the income statements. Each company sold 83,800 units during the year. Cover-to-CoverCompany Biblio FilesCompany Contribution margin ratio (percent) Unit contribution margin Break-even sales (units) Break-even sales (dollars) Review the definitions of contribution margin ratio and unit contribution margin. Also review the formulas for break-even in terms of units sold and sales dollars. Income Statement - Cover-to-Cover Cover-to-Cover CompanyContribution Margin Income StatementFor the Year Ended December 31, 20Y8 Sales $419,000 Variable costs: Manufacturing expense $251,400 Selling expense 20,950 Administrative expense 62,850 (335,200) Contribution margin $83,800 Fixed costs: Manufacturing…
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Menlo Company distributes a single product. The company's sales and expenses for last month follow: Sales Variable expenses. Contribution margin Fixed expenses Net operating income Total $ 624,000 436,800 187,200 146,400 $ 40,800 Required: 1. What is the monthly break-even point in unit sales and in dollar sales? Req 1 2. Without resorting to computations, what is the total contribution margin at the break-even point? 3-a. How many units would have to be sold each month to attain a target profit of $61,200? Req 2 Per Unit 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. 5. What is the company's CM ratio? If the company can sell more units thereby increasing sales by $64,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? $ 40 28 $ 12 Complete this…
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Grease Company makes three products. Following are the revenue and cost data for a typical month. PRODUCTS X Y Z TOTAL Sales P300 P500 P800 P1,600 Variable Costs 100 200 400 700 Contribution Margin P200 P300 P400 P900 Fixed Costs: Avoidable P80 P100 P120 P300 Common, allocated on the basis of peso sales 60 100 160 320 Total Fixed Costs P140 P200 P280 P620 PROFIT P60 P100 P120 P280 REQUIRED: Answer each of the following questions independently. What will total profit be if the company simply drops Product X? The company is considering selling the new product, Product P, in place of Product X. Product P will sell for P7 per unit, have variable costs of P5 per unit, and have avoidable fixed costs of P130. How many units of Product P would be the company has to sell to maintain its total income of P280? The company charges P10 per unit for…
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Contribution Margin Review the contribution margin income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statements. Complete the following table from the data provided on the income statements. Each company sold 81,800 units during the year. Cover-to-CoverCompany Biblio FilesCompany Contribution margin ratio (percent) % % Unit contribution margin $ $ Break-even sales (units) Break-even sales (dollars) $ $ Review the definitions of contribution margin ratio and unit contribution margin. Also review the formulas for break-even in terms of units sold and sales dollars. Income Statement - Cover-to-Cover Cover-to-Cover CompanyContribution Margin Income StatementFor the Year Ended December 31, 20Y8 Sales $409,000 Variable costs: Manufacturing expense $245,400 Selling expense 20,450 Administrative expense 61,350 (327,200) Contribution margin $81,800…
Decaprio Inc. produces and sells a single product. The company has provided its contribution format income statement for June. Sales (6,300 units) Variable expenses Contribution margin Fixed expenses $220,500 113,400 107,100 88,100 Net operating income $ 19,000 If the company sells 6,500 units, its net operating income should be closest to: (Do not round intermediate calculations.)
Required information [The following information applies to the questions displayed below.] Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 40,000 26,000 14,000 8,680 $5,320 9. What is the break-even point in dollar sales? Break-even point
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