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

(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