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