Lucky Products markets two computer games: Predator and Runway. A contribution format income statement for a recent month for the two games appears below:

Predator Runway Total

Sales $114,000 $57,000 $171,000

Variable expenses 42,040 9,260 51,300

Contribution margin $71,960 $47,740 119,700

Fixed expenses 78,750

Net operating income $40,950

Required:

Complete the contribution format income statement at the break-even point for the company showing the appropriate levels of sales for the two products. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.)

Contribution format income statement at the break-even point

                                       Predator     Runway      Total

Sales                               $75,000    $37,500    $112,500

Variable expenses         $27,660    $6,090      $33,750

Contribution margin       $47,340    $31,410      $78,750

Fixed expenses                                                   $78,750

Net operating income                                         $0          

Explanation:

                                 Predator     Runway       Total

Sales                         $114,000    $57,000     $171,000

Sales Ratio                66.67%      33.33%        100%

Variable expenses   $42,040    $9,260       $51,300

V.C Ratio                    36.88%     16.24%        30%

Contribution margin $71,960     $47,740     $119,700

CM Ratio                    63.12%       83.76%      70%

Weight. Avg. Cont.    42.08%      27.92%      70%

Fixed expenses                                              78,750

Break-even (78,750/70%)                              112,500

Net operating income                                   $40,950

Weighted Average contribution = (63.12% X 66.67%) + (83.76% X 33.33%)

Weighted Average contribution = 42.08% + 27.92% = 70%

Sales of Predator = 112,500 x 66.67% = $75,000

Sales of Runway = 112,500 x 33.33% = $37,500

a. money supply  

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