Question

dirt Project O TB Problem Qu. 6-286 Therrell Corporation has two divisions ... Therrell Corporation has two divlelong: Bulb Division and Seed Division. The following report is for the most recent operating perfod: Sales Variable expenses Traceable fixed expenses Common fixed expense s Bulb Seed Division Division $ 304,500 $ 203, eee $ 79,170 $ 42,630 $ 140, 360 $ 81,200 31, 320 $ 20,880 The common fixed expenses have been allocated to the divisions on the basis of sales. Required: a. What is the Bulb Division's break-even in sales dollars? b. What is the Seed Driston's break-even in sales dollars? c. What is the company's overall break-even in sales dollars? (For all requirements, do not round Intermediate calculations. Round your answer to the nearest whole dollar amount.) Bub o is break-even in sales daars Send Divisions break even in sales de las Com ove break even in sales de las

Answer 1

Ans.		Bulb Division		Seed Division		Total Company
		Amount	%	Amount	%	Amount	%
	Sales	$304,500	100%	$203,000	100%	$507,500	100%
	Less: Variable expenses	$79,170	26%	$42,630	21%	$121,800	24%
	Contribution margin	$225,330	74%	$160,370	79%	$385,700	76%
	Less: Traceable fixed expenses	$140,360		$81,200		$221,560
	Segment margin	$84,970		$79,170		$164,140
	Less: Common fixed expense					$52,200
	Net operating income					$111,940
Ans. A	Bulb division's break even in sales dollars = Traceable fixed expenses / Contribution margin ratio
	$140,360 / 74%
	$189,676	(rounded off)
Ans. B	Seed division's break even in sales dollars = Traceable fixed expenses / Contribution margin ratio
	$160,370 / 79%
	$177,671	(rounded off)
Ans. C	Company's overall break even in sales dollars = Total fixed expenses / Contribution margin ratio
	$273,760 / 76%
	$360,211	(rounded off)
	*Total fixed expenses = Traceable fixed expenses + Common fixed expense
	$221,560 + $52,200
	$273,760