Nuzum Corporation has two divisions: Division M and Division N. Data from the most recent month appear below: Management has allocated common fixed expenses to the Divisions based on their sales. The break-even in sales dollars for Division N is closest to:
A) $248,747
B) $496,987
C) $183,544
D) $303,405

Question

Nuzum Corporation has two divisions: Division M and Division N. Data from the most recent month appear below:  Management has allocated common fixed expenses to the Divisions based on their sales. The break-even in sales dollars for Division N is closest to:
A) $248,747 
B) $496,987 
C) $183,544 
D) $303,405

Quizplus · Accepted Answer

Division N:
Segment CM ratio = Segment contribution margin ÷ Segment sales
= $239,370 ÷ $303,000 = 0.79
Dollar sales for a segment to break even = Segment traceable fixed expenses ÷ Segment CM ratio
= $145,000 ÷ 0.79 = $183,544

Nuzum Corporation Has Two Divisions: Division M and Division N