Rollison Corporation has two divisions: Retail Division and Wholesale Division.The following data are for the most recent operating period: The common fixed expenses of the company are $76, 300. The Retail Division's break-even sales in dollars is closest to:
A)$469, 884
B)$200, 000
C)$251, 211
D)$300, 395

Question

Rollison Corporation has two divisions: Retail Division and Wholesale Division.The following data are for the most recent operating period:  The common fixed expenses of the company are $76, 300. The Retail Division's break-even sales in dollars is closest to:
A)$469, 884 
B)$200, 000 
C)$251, 211 
D)$300, 395

Quizplus · Accepted Answer

Segment contribution margin = Segment sales - Segment variable expenses
= $278, 000 - $66, 720 = $211, 280
Segment CM ratio = Segment contribution margin ÷ Segment sales
= $211, 280 ÷ $278, 000 = 0.760
Dollar sales for a segment to break even = Traceable fixed expenses ÷ Segment CM ratio
= $152, 000 ÷ 0.760 = $200, 000

Rollison Corporation Has Two Divisions: Retail Division and Wholesale Division