Question Details

(solution) Lucky Products markets two computer games: Predator and Runway.


Lucky Products markets two computer games: Predator and Runway. The company sold 2,000 Predator and 1,000 Runway.  A contribution format income statement for a recent month for the two games appears below:

                                               

                                                                Predator              Runway                Total

Sales                                                      $100,000              $50,000                 $150,000

Variable Expenses                              25,000                    5,000                     30,000

Contribution Margin                       $75,000                $45,000                 $120,000

Fixed Expenses                                                                                                     90,000

Net Operating Income                                                                                     $30,000

 

REQUIRED

Using a ratio of 2 Predators sold by 1 Runway sold, determine the Break-even point for the company

Determine the BEP if the company only sells Predator games

Determine the BEP if the company only sells Runway games

 

D


AVG CM Ratio

 

Break even total $ 0.8

 

112,500 CM ratio for Predators

 

Break even Predators $ 0.75

 

120,000 $ 0.9

 

100,000 CM ratio for Runway

 

Break even Runway

 


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Sep 13, 2020

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