1.
Contribution margin ratio for company = Contribution margin/Sales
= 300,000/937,500
= 32%
Total fixed cost of company = Traceable fixed expenses + Common fixed expenses
= 142,000+62,000
= $204,000
Dollar sales for North segment to break-even = Fixed cost/ Contribution margin ratio
= 204,000/32%
= $637,500
2.
Contribution margin for North segment = Contribution margin/Sales
= 150,000/750,000
= 20%
Total fixed cost of North Segment = Traceable fixed expenses
= $71,000
Dollar sales for North segment to break-even = Fixed cost/ Contribution margin ratio
= 71,000/20%
= $355,000
3.
Contribution margin for South segment = Contribution margin/Sales
= 150,000/187,500
= 80%
Total fixed cost of South Segment = Traceable fixed expenses
= $71,000
Dollar sales for South segment to break-even = Fixed cost/ Contribution margin ratio
= 71,000/80%
= $88,750
1. | Dollar sales for company to break-even | $637,500 |
2. | Dollar sales for North segment to break-even | $355,000 |
3. | Dollar sales for South segment to break-even | $88,750 |
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Piedmont Company segments its business into two regions-North and South. The company prepared the contribution format...
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