Carolfi Corporation has two divisions: Division A and Division B. Data from the most recent month appear below: The break-even in sales dollars for Division A is closest to:
A)$389,524
B)$541,238
C)$230,952
D)$704,261 Division A: Segment CM ratio = Segment contribution margin ÷ Segment sales = $155,400 ÷ $370,000 = 0.42 Dollar sales for a segment to break even = Segment traceable fixed expenses ÷ Segment CM ratio = $97,000 ÷ 0.42 = $230,952

Question

Carolfi Corporation has two divisions: Division A and Division B. Data from the most recent month appear below:  The break-even in sales dollars for Division A is closest to:
A)$389,524 
B)$541,238 
C)$230,952 
D)$704,261 Division A: Segment CM ratio = Segment contribution margin ÷ Segment sales = $155,400 ÷ $370,000 = 0.42 Dollar sales for a segment to break even = Segment traceable fixed expenses ÷ Segment CM ratio = $97,000 ÷ 0.42 = $230,952

Quizplus · Accepted Answer

The break-even in sales dollars for Division A is calculated as follows:
Dollar sales for a segment to break even = Segment traceable fixed expenses ÷ Segment CM ratio
= $97,000 ÷ 0.42 = $230,952. Therefore, the closest option is C) $230,952.

Carolfi Corporation Has Two Divisions: Division a and Division B