Holts Corporation has two divisions: Xi and Sigma.Data from the most recent month appear below:
The company's common fixed expenses total $78,840.The break-even in sales dollars for Sigma Division is closest to:
A) $487,491
B) $606,715
C) $466,018
D) $119,225

Question

Holts Corporation has two divisions: Xi and Sigma.Data from the most recent month appear below:
 The company's common fixed expenses total $78,840.The break-even in sales dollars for Sigma Division is closest to:
A) $487,491 
B) $606,715 
C) $466,018 
D) $119,225

Quizplus · Accepted Answer

11ea7761_1819_d2c3_81a5_edc672b41d12_TB2580_00 Overall CM ratio = Contribution margin ÷ Sales = $422,150 ÷ $657,000 = 0.64 (rounded; the exact value is used in subsequent computations)
Dollar sales for the company to break even = (Traceable fixed expenses + Common fixed expenses) ÷ CM ratio = ($311,000 + $78,840) ÷ 0.64 = $606,715 (your answer may differ due to rounding)

Holts Corporation Has Two Divisions: Xi and Sigma