Piedmont Company segments its business into two regions North and South. The company prepared the contribution format segmented income statement as shown:
Required:
1. Compute the companywide break-even point in dollar sales.
2. Compute the break-even point in dollar sales for the North region.
3. Compute the break-even point in dollar sales for the South region.
Contribution margin ratio = Contribution margin / Sales
Contribution margin ratio | |
Total company | 0.4 ($240,000/$600,000) |
North | 0.3 ($120,000/$400,000) |
South | 0.6 ($120,000/$200,000) |
1. Company wide break-even point in dollar sales = Fixed costs / Contribution margin ratio
= ($120,000 + $50,000) / 0.4
= $425,000
2. Break-even point in dollar sales for North region = Traceable fixed expenses / Contribution margin ratio
= $60,000 / 0.3
= $200,000
3. Break-even point in dollar sales for South region = Traceable fixed expenses / Contribution margin ratio
= $60,000 / 0.6
= $100,000
Piedmont Company segments its business into two regions North and South.
5. Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format segmented income statement as shown: Compute the companywide break-even point in dollar sales. Compute the break-even point in dollar sales for the North region. Compute the break-even point in dollar sales for the South region. Piedmont Company segments its business into two regions-North and South. The company prepared the contribution format segmented income statement as shown: Sales Variable expenses Contribution margin Traceable fixed...
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