Keefe Corporation has two divisions: Western Division and Eastern Division.The following report is for the most recent operating period: The common fixed expenses have been allocated to the divisions on the basis of sales. The Western Division's break-even sales is closest to:
A)$266, 255
B)$368, 309
C)$307, 709
D)$170, 909

Question

Keefe Corporation has two divisions: Western Division and Eastern Division.The following report is for the most recent operating period:  The common fixed expenses have been allocated to the divisions on the basis of sales. The Western Division's break-even sales is closest to:
A)$266, 255 
B)$368, 309 
C)$307, 709 
D)$170, 909

Quizplus · Accepted Answer

Segment CM ratio = Segment contribution margin ÷ Segment sales
= $151, 800 ÷ $276, 000 = 0.550
Dollar sales for a segment to break even = Traceable fixed expenses ÷ Segment CM ratio
= $94, 000 ÷ 0.550 = $170, 909

Keefe Corporation Has Two Divisions: Western Division and Eastern Division