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11 January, 07:13

Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: Claimjumper Makeover Total Sales $ 116,000 $ 58,000 $ 174,000 Variable expenses 35,800 7,700 43,500 Contribution margin $ 80,200 $ 50,300 130,500 Fixed expenses 86,175 Net operating income $ 44,325 Required: 1. What is the overall contribution margin (CM) ratio for the company?

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  1. 11 January, 10:37
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    75%

    Explanation:

    Given that,

    Total Sales = $174,000

    Total Variable expenses = $43,500

    Total contribution margin = $130,500

    Total fixed expenses = $86,175

    Net operating income = $44,325

    Overall contribution margin (CM) ratio for the company:

    = (Total contribution margin : Total sales) * 100

    = ($130,500 : $174,000) * 100

    = 0.75 * 100

    = 75%
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