Gulinson Corporation has two divisions: Division A and Division B. Data from the most recent month appear below: The break-even in sales dollars for Division A is closest to:
A) $134,694
B) $184,531
C) $487,179
D) $267,367

Question

Gulinson Corporation has two divisions: Division A and Division B. Data from the most recent month appear below:  The break-even in sales dollars for Division A is closest to:
A) $134,694 
B) $184,531 
C) $487,179 
D) $267,367

Quizplus · Accepted Answer

To find the break-even sales for Division A, we need to use the formula: break-even sales = fixed expenses / contribution margin ratio.

Using the data from Division A, we have: 
Fixed expenses = $56,000 + $24,000 = $80,000 
Contribution margin ratio = ($240,000 - $136,000) / $240,000 = 0.4333

Plugging these values into the formula, we get: 
Break-even sales = $80,000 / 0.4333 = $184,531.20

Therefore, the closest answer choice is A) $134,694.

Gulinson Corporation Has Two Divisions: Division a and Division B