Question

Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format segmented income statement as shown:

		Total Company			North			South
Sales	$	937,500		$	750,000		$	187,500
Variable expenses		637,500			600,000			37,500
Contribution margin		300,000			150,000			150,000
Traceable fixed expenses		146,000			73,000			73,000
Segment margin		154,000		$	77,000		$	77,000
Common fixed expenses		64,000
Net operating income	$	90,000

Required:

1. Compute the companywide break-even point in dollar sales.

2. Compute the break-even point in dollar sales for the North region.

3. Compute the break-even point in dollar sales for the South region.

Answer 1

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