Wyrich Corporation has two divisions: Blue Division and Gold Division. The following report is for the most recent operating period: The Gold Division's break-even sales is closest to:
A) $102,174
B) $261,043
C) $142,043
D) $518,750

Question

Wyrich Corporation has two divisions: Blue Division and Gold Division. The following report is for the most recent operating period:  The Gold Division's break-even sales is closest to:
A) $102,174 
B) $261,043 
C) $142,043 
D) $518,750

Quizplus · Accepted Answer

Segment CM ratio = Segment contribution margin ÷ Segment sales
= $60,260 ÷ $131,000 = 0.460
Dollar sales for a segment to break even = Traceable fixed expenses ÷ Segment CM ratio
= $47,000 ÷ 0.460 = $102,174

Wyrich Corporation Has Two Divisions: Blue Division and Gold Division