Combe Corporation has two divisions: Alpha and Beta.Data from the most recent month appear below: The company's common fixed expenses total $80,800.The break-even in sales dollars for Alpha Division is closest to:
A)$491,129
B)$143,478
C)$187,536
D)$260,580

Question

Combe Corporation has two divisions: Alpha and Beta.Data from the most recent month appear below:  The company's common fixed expenses total $80,800.The break-even in sales dollars for Alpha Division is closest to:
A)$491,129 
B)$143,478 
C)$187,536 
D)$260,580

Quizplus · Accepted Answer

Alpha Division:
Segment contribution margin = Segment sales - Segment variable expenses
= $190,000 - $58,900 = $131,100
Segment CM ratio = Segment contribution margin ÷ Segment sales
= $131,100 ÷ $190,000 = 0.69
Dollar sales for a segment to break even = Segment traceable fixed expenses ÷ Segment CM ratio
= $99,000 ÷ 0.69 = $143,478

Combe Corporation Has Two Divisions: Alpha and Beta