Rollison Corporation has two divisions: Retail Division and Wholesale Division.The following data are for the most recent operating period: The common fixed expenses of the company are $76, 300. The Wholesale Division's break-even sales in dollars is closest to:
A)$164, 286
B)$217, 686
C)$273, 286
D)$469, 884

Question

Rollison Corporation has two divisions: Retail Division and Wholesale Division.The following data are for the most recent operating period:  The common fixed expenses of the company are $76, 300. The Wholesale Division's break-even sales in dollars is closest to:
A)$164, 286 
B)$217, 686 
C)$273, 286 
D)$469, 884

Quizplus · Accepted Answer

Segment contribution margin = Segment sales - Segment variable expenses
= $267, 000 - $80, 100 = $186, 900
Segment CM ratio = Segment contribution margin ÷ Segment sales
= $186, 900 ÷ $267, 000 = 0.700
Dollar sales for a segment to break even = Traceable fixed expenses ÷ Segment CM ratio
= $115, 000 ÷ 0.700 = $164, 286

Rollison Corporation Has Two Divisions: Retail Division and Wholesale Division