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Business
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Variable expenses Contribution margin Fixed expenses Net operating income 55,000 $ 65,000 17,000 $23,000 72,000 88,000 41.250 $ 46.750 Required: 1. Compute the overall contribution margin (CM) ratio for the company. 2. Compute the overall break-even point for the company in dollar sales. 3. Verify the overall break-even point for the company by constructing a contribution form income statement showing the appropriate levels of sales for the two products.

Variable expenses Contribution margin Fixed expenses Net operating income 55,000 $ 65,000 17,000 $23,000 72,000 88,000 41.250 $ 46.750 Required: 1. Compute the overall contribution margin (CM) ratio for the company. 2. Compute the overall break-even point for the company in dollar sales. 3. Verify the overall break-even point for the company by constructing a contribution form income statement showing the appropriate levels of sales for the two products.

FINANCIAL ACCOUNTING
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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Shamrock Products markets two video games: Running and Skiing. 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 Running $120,000 $5,000 $ 65,000 Skiing $40,000 17,000 $23,000 Total $160,000 72,000 88,000 41.250 $46.750 Required: 1. Compute the overall contribution margin (CM) ratio for the company. 2. Compute the overall break-even point for the company in dollar sales. 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.
Transcribed Image Text:Shamrock Products markets two video games: Running and Skiing. 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 Running $120,000 $5,000 $ 65,000 Skiing $40,000 17,000 $23,000 Total $160,000 72,000 88,000 41.250 $46.750 Required: 1. Compute the overall contribution margin (CM) ratio for the company. 2. Compute the overall break-even point for the company in dollar sales. 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.
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