## (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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