Sosinski Corporation has two divisions: Domestic Division and Foreign Division.The following data are for the most recent operating period: The common fixed expenses have been allocated to the divisions on the basis of sales. The Foreign Division's break-even sales is closest to:
A)$160, 294
B)$275, 794
C)$466, 116
D)$214, 029

Question

Sosinski Corporation has two divisions: Domestic Division and Foreign Division.The following data are for the most recent operating period:  The common fixed expenses have been allocated to the divisions on the basis of sales. The Foreign Division's break-even sales is closest to:
A)$160, 294 
B)$275, 794 
C)$466, 116 
D)$214, 029

Quizplus · Accepted Answer

Segment contribution margin = Segment sales - Segment variable expenses
= $261, 000 - $83, 520 = $177, 480
Segment CM ratio = Segment contribution margin ÷ Segment sales
= $177, 480 ÷ $261, 000 = 0.680
Dollar sales for a segment to break even = Traceable fixed expenses ÷ Segment CM ratio
= $109, 000 ÷ 0.680 = $160, 294

Sosinski Corporation Has Two Divisions: Domestic Division and Foreign Division