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

11ea7998_5dbd_5385_911b_1ba8133ccb68_TB2627_00_TB2627_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