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 Domestic Division's break-even sales is closest to:
A)$252,632
B)$466,116
C)$178,947
D)$316,737

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 Domestic Division's break-even sales is closest to:
A)$252,632 
B)$466,116 
C)$178,947 
D)$316,737

Quizplus · Accepted Answer

Segment contribution margin = Segment sales - Segment variable expenses
= $300,000 - $129,000 = $171,000
Segment CM ratio = Segment contribution margin ÷ Segment sales
= $171,000 ÷ $300,000 = 0.570
Dollar sales for a segment to break even = Traceable fixed expenses ÷ Segment CM ratio
= $102,000 ÷ 0.570 = $178,947

Sosinski Corporation Has Two Divisions: Domestic Division and Foreign Division