Carlton Corporation has two divisions: Delta and Echo.Data from the most recent month appear below: The company's common fixed expenses total $44,110.The break-even in sales dollars for Echo Division is closest to:
A)$146,756
B)$336,719
C)$214,902
D)$107,317

Question

Carlton Corporation has two divisions: Delta and Echo.Data from the most recent month appear below:   The company's common fixed expenses total $44,110.The break-even in sales dollars for Echo Division is closest to:
A)$146,756 
B)$336,719 
C)$214,902 
D)$107,317

Quizplus · Accepted Answer

Echo Division:
Segment contribution margin = Segment sales - Segment variable expenses
= $147,000 - $86,730 = $60,270
Segment CM ratio = Segment contribution margin ÷ Segment sales
= $60,270 ÷ $147,000 = 0.41
Dollar sales for a segment to break even = Segment traceable fixed expenses ÷ Segment CM ratio
= $44,000 ÷ 0.41 = $107,317
Reference: CHO7-Ref1
Caruso Inc., which produces a single product, has provided the following data for its most recent month of operations: 11ea7998_5dbe_b31b_911b_e5de2097ffe4_TB2627_00_TB2627_00 There were no beginning or ending inventories.

Carlton Corporation Has Two Divisions: Delta and Echo