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Piedmont Company segments its business into two regions-North and South. The company prepared the contribution format segment

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Answer #1

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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