Question

elisa Corporation has two divisions: Division L and Division Q. Data from the most recent month appear below: Total Company Division L Division Q Sales $ 517,000 $ 156,000 $ 361,000 Variable expenses 255,960 82,680 173,280 Contribution margin 261,040 73,320 187,720 Traceable fixed expenses 171,000 49,000 122,000 Segment margin 90,040 $ 24,320 $ 65,720 Common fixed expenses 87,890 Net operating income $ 2,150 The break-even in sales dollars for Division Q is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

$234,615.38

Step-by-step explanation:

The computation of the break-even in sales dollars for Division Q is shown below:

Contribution Margin Ratio for the Division Q is

=Contribution Margin ÷ Sales × 100

= $187,720 ÷ $361,000

= 52%

ANd, Traceable fixed expenses = $122,000

Now

break-even in sales dollars for Division Q is

= Traceable Fixed Cost of Division Q Contribution Margin Ratio for the Division Q

= $122,000 ÷ 52%

= $234,615.38