Question

Neelon Corporation has two divisions: Southern Division and Northern Division. The following data are for the most recent operating period:

	Total Company		Southern Division			Northern Division
Sales	$	421,900	$	223,900		$	198,000
Variable expenses	$	158,860	$	89,560		$	69,300
Traceable fixed expenses	$	233,200	$	87,200		$	146,000
Common fixed expense	$	84,380	$	44,780		$	39,600

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:

• $219,967

• $179,120

• $285,967

• $224,615

Answer 1