FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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5-10

Chapter 5
R.
220
EXERCISE 5–10 Compute the Break-Even Point for a Multiproduct Company [LO5-9]
Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format
income statement for a recent month for the two games appears below:
Makeover
Total
Claimjumper
$70,000
$100,000
$30,000
20,000
$10,000
Sales
50,000
70,000
Variable expenses
30,000
24,000
$ 6,000
$20,000
Contribution margin . ..
Fixed expenses . ..
Net operating income ..
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.
EXERCISE 5-11 Missing Data; Basic CVP Concepts [LO5-1, LO5-9]
Fill in the missing amounts in each of the eight case situations below. Each case is independent of
the others. (Hint: One way to find the missing amounts would be to prepare a contribution format
income statement for each case, enter the known data, and then compute the missing items.)
Assume that only one product is being sold in each of the four following case situations:
a.
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Transcribed Image Text:Chapter 5 R. 220 EXERCISE 5–10 Compute the Break-Even Point for a Multiproduct Company [LO5-9] Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: Makeover Total Claimjumper $70,000 $100,000 $30,000 20,000 $10,000 Sales 50,000 70,000 Variable expenses 30,000 24,000 $ 6,000 $20,000 Contribution margin . .. Fixed expenses . .. Net operating income .. 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. EXERCISE 5-11 Missing Data; Basic CVP Concepts [LO5-1, LO5-9] Fill in the missing amounts in each of the eight case situations below. Each case is independent of the others. (Hint: One way to find the missing amounts would be to prepare a contribution format income statement for each case, enter the known data, and then compute the missing items.) Assume that only one product is being sold in each of the four following case situations: a.
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