Question

Delisa Corporation has two divisions: Division L and Division Q.
Data from the most recent month appear below:

Total Company Division L Division Q
Sales $ 510,000 $153,000 $357,000
Variable expenses 312,120 87,210 224,910
Contribution margin 197,880 65,790 132,090
Traceable fixed expenses 113,360 35,280 78,080
Segment margin 84,520 $30,510 $54,010
Common fixed expenses 65,040
Net operating income $19,480

The break-even in sales dollars for Division Q is closest to: (Round your intermediate calculations to 2 decimal places.)

a) $291,760 b) $211,027 c) $227,175 d) $395,760

Answer 1

Answer:

b) $211,027

Explanation:

Break Even Sales Volume in Dollars= Fixed Costs/ 1- (variable Costs/ Sales)

Break Even Sales Volume in Dollars= 78080/1- (224910/357,000)

Break Even Sales Volume in Dollars= 78080/1-0.63

Break Even Sales Volume in Dollars= 78080/0.37

Break Even Sales Volume in Dollars=$211,027.027

Working

              Total Company     Division L     Division Q

Sales       $ 510,000            $153,000       $357,000

Variable expenses 312,120    87,210         224,910

Contribution margin 197,880 65,790         132,090

Traceable fixed expenses 113,360 35,280 78,080

Segment margin 84,520       $30,510          $54,010

Common fixed expenses 65,040

Net operating income $19,480