Carrejo Corporation has two divisions: Division M and Division N.Data from the most recent month appear below: Management has allocated common fixed expenses to the Divisions based on their sales.The break-even in sales dollars for Division N is closest to:
A)$172, 131
B)$219, 656
C)$258, 230
D)$392, 211

Question

Carrejo Corporation has two divisions: Division M and Division N.Data from the most recent month appear below:  Management has allocated common fixed expenses to the Divisions based on their sales.The break-even in sales dollars for Division N is closest to:
A)$172, 131 
B)$219, 656 
C)$258, 230 
D)$392, 211

Quizplus · Accepted Answer

Division N:
Segment CM ratio = Segment contribution margin ÷ Segment sales
= $136, 030 ÷ $223, 000 = 0.61
Dollar sales for a segment to break even = Segment traceable fixed expenses ÷ Segment CM ratio
= $105, 000 ÷ 0.61 = $172, 131

Carrejo Corporation Has Two Divisions: Division M and Division N