Delisa Corporation has two divisions: Division L and Division Q.Data from the most recent month appear below: The break-even in sales dollars for Division Q is closest to:

A) $352,635
B) $234,615
C) $403,635
D) $512,742

Question

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

The break-even in sales dollars for Division Q is closest to:

A) $352,635
B) $234,615
C) $403,635
D) $512,742

Orieon James · Accepted Answer

Final Answer : B, Explanation :  To find the break-even point for Division Q, we need to use the contribution margin ratio.Contribution margin ratio = (Sales - Variable expenses) / SalesFor Division Q:Contribution margin ratio = ($431,000 - $231,000) / $431,000 = 0.465Now we can use the following formula to find the break-even point:Break-even = Fixed expenses / Contribution margin ratioFor Division Q:Break-even = $85,000 / 0.465 = $182,796.68Therefore, the closest option is B) $234,615. Division Q:Segment CM ratio = Segment contribution margin ÷ Segment sales= $187,720 ÷ $361,000 = 0.52Dollar sales for a segment to break even = Segment traceable fixed expenses ÷ Segment CM ratio= $122,000 ÷ 0.52 = $234,615

Delisa Corporation has two divisions: Division L and Division Q.Data from the most recent month appear below: The break-even in sales dollars for Division Q is closest to:

A) $352,635
B) $234,615
C) $403,635
D) $512,742

Definitions

Learning Objectives

Learning Objectives

Related questions

Delisa Corporation has two divisions: Division L and Division Q.Data from the most recent month appear below: The break-even in sales dollars for Division Q is closest to:A) $352,635B) $234,615C) $403,635D) $512,742

Definitions

Learning Objectives

Learning Objectives

Related questions

Delisa Corporation has two divisions: Division L and Division Q.Data from the most recent month appear below: The break-even in sales dollars for Division Q is closest to:

A) $352,635
B) $234,615
C) $403,635
D) $512,742