Mckissic Corporation has two divisions: Domestic and Foreign. Data from the most recent month appear below: The break-even in sales dollars for the company as a whole is closest to:
A) $437,304
B) $347,886
C) $394,323
D) $89,418

Question

Mckissic Corporation has two divisions: Domestic and Foreign. Data from the most recent month appear below:  The break-even in sales dollars for the company as a whole is closest to:
A) $437,304 
B) $347,886 
C) $394,323 
D) $89,418

Quizplus · Accepted Answer

Overall company:
CM ratio = Contribution margin ÷ Sales
= $292,760 ÷ $450,000 = 0.65
Fixed expenses = Traceable fixed expenses + Common fixed expenses
= $226,000 + $58,500 = $284,500
Dollar sales to break even = Fixed expenses ÷ CM ratio
= $284,500 ÷ 0.65 = $437,304

Mckissic Corporation Has Two Divisions: Domestic and Foreign