Keefe Corporation has two divisions: Western Division and Eastern Division.The following report is for the most recent operating period: The common fixed expenses have been allocated to the divisions on the basis of sales. The Western Division's break-even sales is closest to:
A)$266,255
B)$368,309
C)$307,709
D)$170,909

Question

Keefe Corporation has two divisions: Western Division and Eastern Division.The following report is for the most recent operating period:  The common fixed expenses have been allocated to the divisions on the basis of sales. The Western Division's break-even sales is closest to:
A)$266,255 
B)$368,309 
C)$307,709 
D)$170,909

Quizplus · Accepted Answer

Segment CM ratio = Segment contribution margin ÷ Segment sales
= $151,800 ÷ $276,000 = 0.550
Dollar sales for a segment to break even = Traceable fixed expenses ÷ Segment CM ratio
= $94,000 ÷ 0.550 = $170,909

Keefe Corporation Has Two Divisions: Western Division and Eastern Division