Question

Neelon Corporation has two divisions: Southern Division and Northern Division. The following data are for the most recent operating period: Total Southern Company Division $301,300 $167,900 $112,125 $ 58,765 $ 169,600 $ 57,200 $ 60,260 $ 33,580 Sales Variable expenses Traceable fixed expenses Common fixed expense Northern Division $133,400 $ 53,360 $112,400 $ 26,680 ( 8 00:12:47 The common fixed expenses have been allocated to the divisions on the basis of sales. The Northern Division's break-even sales is closest to:

Answer 1

Answer

The Correct Answer is C : $187,333

Explanation

Segment contribution margin = Segment sales – Segment variable expenses =

$133,400 – $53360 = $80,240

Segment contribution margin ratio = $80,240 / $133,400 = 0.60

Dollar sales for a segment to break even = $112,400 / 0.60 = $187,333