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 $ 553,000 $ 145,000 $ 408,000 Variable expenses 309,680 81,200 228,480 Contribution margin 243,320 63,800 179,520 Traceable fixed expenses 107,490 31,850 75,640 Segment margin 135,830 $ 31,950 $ 103,880 Common fixed expenses 49,220 Net operating income $ 86,610 The break-even in sales dollars for Division Q is closest to:

Answer 1

Answer:

The break-even in sales dollars for Division Q is closest to $171,909

Explanation:

In order to calculate the The break-even in sales dollars for Division Q we would have to calculate the following formula:

break-even in sales dollars for Division Q=Division Q Fixed cost/contribution margin ratio

Division Q Fixed cost=$75,640

contribution margin ratio=contribution margin/sales

contribution margin ratio=$179,520/$408,000

contribution margin ratio=44%

Therefore, break-even in sales dollars for Division Q=$75,640/44%

break-even in sales dollars for Division Q=$171,909

The break-even in sales dollars for Division Q is closest to $171,909