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