Gough Corporation has two divisions: Domestic and Foreign.Data from the most recent month appear below: The break-even in sales dollars for the company as a whole is closest to:
A)$609,794
B)$502,579
C)$107,216
D)$436,424

Question

Gough Corporation has two divisions: Domestic and Foreign.Data from the most recent month appear below:  The break-even in sales dollars for the company as a whole is closest to:
A)$609,794 
B)$502,579 
C)$107,216 
D)$436,424

Quizplus · Accepted Answer

Overall company:
CM ratio = Contribution margin ÷ Sales
= $447,470 ÷ $668,000 = 0.67
Fixed expenses = Traceable fixed expenses + Common fixed expenses
= $335,000 + $73,480 = $408,480
Dollar sales to break even = Fixed expenses ÷ CM ratio
= $408,480 ÷ 0.67 = $609,794 (using unrounded decimals)

Gough Corporation Has Two Divisions: Domestic and Foreign