Question

Bertie Corporation has two divisions: Retail Division and Wholesale Division. The following data are for the...

Bertie Corporation has two divisions: Retail Division and Wholesale Division. The following data are for the most recent operating period:

Total Company Retail Division Wholesale Division
Sales $ 680,000 $ 375,000 $ 233,000
Variable expenses $ 185,530 $ 90,000 $ 95,530
Traceable fixed expenses $ 303,000 $ 217,000 $ 86,000

The common fixed expenses of the company are $103,360.

The company’s overall break-even sales is closest to:

$153,526

$431,289

$526,014

$584,815
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

CM ratio of retail division = ( 375000 - 90000 ) / 375000 = 76 %

CM ratio of wholesale division = ( 233000 - 95530 ) / 233000 = 59 %

Sales mix ( retail division ) = 375000 / 608000 = 0.6168 ; [ 375000 + 233000 = 608000 ]

Sales mix ( retail division ) = 233000 / 608000 = 0.3832

Weighted avg. CM ratio = 0.6168 * 76 % + 0.3832 * 59 % = 69.4856 %

company’s overall break-even sales = Fixed costs / Weighted avg. CM ratio

( 303000 + 103360 ) / 0.694856

406360 / 0.694856 = $ 584812

Option d is correct.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Neelon Corporation has two divisions: Southern Division and Northern Division. The following data are for the...
Neelon Corporation has two divisions: Southern Division and Northern Division. The following data are for the most recent operating period: Total Company Southern Division Northern Division Sales $ 267,000 $ 154,400 $ 112,600 Variable expenses $ 90,908 $ 57,128 $ 33,780 Traceable fixed expenses $ 126,800 $ 55,600 $ 71,200 Common fixed expense $ 53,400 $ 30,880 $ 22,520 The common fixed expenses have been allocated to the divisions on the basis of sales. The Northern Division’s break-even sales is...
Harper Corporation has two divisions: Blue Division and Gold Division. The following report is for the...
Harper Corporation has two divisions: Blue Division and Gold Division. The following report is for the most recent operating period: Total Company Blue Division Gold Division Sales $ 522,000 $ 391,000 $ 131,000 Variable expenses 160,670 89,930 70,740 Contribution margin 361,330 301,070 60,260 Traceable fixed expenses 286,000 239,000 47,000 Segment margin 75,330 $ 62,070 $ 13,260 Common fixed expenses 73,080 Net operating income $ 2,250 The company’s overall break-even sales is closest to: A. 412,564 B.506,409 C.518,750 D.106,186
Pherrell Corporation has two divisions: Bulb Division and Seed Division. The following report is for the...
Pherrell Corporation has two divisions: Bulb Division and Seed Division. The following report is for the most recent operating period: Bulb Division Seed Division Sales $ 238,500 $ 159,000 Variable expenses $ 62,010 $ 33,390 Traceable fixed expenses $ 144,480 $ 65,190 Common fixed expense $ 30,180 $ 20,120 The common fixed expenses have been allocated to the divisions on the basis of sales. Required: a. What is the Bulb Division’s break-even in sales dollars? b. What is the Seed...
Therrell Corporation has two divisions: Bulb Division and Seed Division. The following report is for the...
Therrell Corporation has two divisions: Bulb Division and Seed Division. The following report is for the most recent operating period: Bulb Division Seed Division Sales $ 231,000 $ 154,000 Variable expenses $ 60,060 $ 32,340 Traceable fixed expenses $ 161,760 $ 70,840 Common fixed expense $ 29,460 $ 19,640 The common fixed expenses have been allocated to the divisions on the basis of sales. Required: a. What is the Bulb Division’s break-even in sales dollars? b. What is the Seed...
Therrell Corporation has two divisions: Bulb Division and Seed Division. The following report is for the...
Therrell Corporation has two divisions: Bulb Division and Seed Division. The following report is for the most recent operating period: Bulb Division Seed Division Sales $ 313,500 $ 209,000 Variable expenses $ 81,510 $ 43,890 Traceable fixed expenses $ 132,940 $ 94,050 Common fixed expense $ 29,880 $ 19,920 The common fixed expenses have been allocated to the divisions on the basis of sales. Required: a. What is the Bulb Division’s break-even in sales dollars? b. What is the Seed...
Therrell Corporation has two divisions: Bulb Division and Seed Division. The following report is for the...
Therrell Corporation has two divisions: Bulb Division and Seed Division. The following report is for the most recent operating period: Bulb Division Seed Division Sales $ 231,000 $ 154,000 Variable expenses $ 60,060 $ 32,340 Traceable fixed expenses $ 158,000 $ 63,140 Common fixed expense $ 28,200 $ 18,800 The common fixed expenses have been allocated to the divisions on the basis of sales. Required: a. What is the Bulb Division’s break-even in sales dollars? b. What is the Seed...
Delisa Corporation has two divisions: Division L and Division Q. Data from the most recent month...
Delisa Corporation has two divisions: Division L and Division Q. Data from the most recent month appear below: Total Company Division L Division Q Sales $ 475,000 $ 179,000 $ 296,000 Variable expenses 279,560 93,080 186,480 Contribution margin 195,440 85,920 109,520 Traceable fixed expenses 117,740 32,340 85,400 Segment margin 77,700 $ 53,580 $ 24,120 Common fixed expenses 45,700 Net operating income $ 32,000 The break-even in sales dollars for Division Q is closest to: Multiple Choice $281,180 $230,811 $208,095 $390,880
Fausnaught Corporation has two major business segments—the Retail Division and the Wholesale Division. In October, the...
Fausnaught Corporation has two major business segments—the Retail Division and the Wholesale Division. In October, the Retail business segment had sales revenues of $731,812, variable expenses of $409,726, and traceable fixed expenses of $117,202. During the same month, the Wholesale business segment had sales revenues of $402,997, variable expenses of $220,603, and traceable fixed expenses of $48,226. Common fixed expenses totaled $218,000.                         Required:                     Prepare segmented income statements for the Retail Division and for the Wholesale Division....
Buskirk Enterprises has two divisions, a Farm Division and a Garden Division, and reported the following...
Buskirk Enterprises has two divisions, a Farm Division and a Garden Division, and reported the following information for its most recent year:                                                                         Total               Farm               Garden             Sales                                                    $265,000         $163,000         $102,000             Variable expenses                               105,390           63,570             41,820             Contribution margin                            $159,610         $99,430           $60,180             Traceable fixed expenses                    110,000           68,000             42,000             Segment margin                                  $49,610           $31,430           $18,180             Common fixed expenses                     31,800             Net operating income                          $17,810 1. What is Buskirk’s overall break-even in sales dollars? 2. What would the company’s overall net operating income be if it operated at its two division’s break-even points?
Lucky Brands has two divisions: Cigars and Rum. The following data is from its most recent...
Lucky Brands has two divisions: Cigars and Rum. The following data is from its most recent operating period:                                                                         Cigars             Rum             Sales                                                    $310,000         $205,000             Variable expenses                               $80,290           $42,795             Traceable fixed expenses                    $118,800         $90,000 The company’s common fixed expenses were $48,000 and are allocated to the divisions on the basis of sales. 1. What is the Cigar division’s break-even in sales dollars? 2. What is Lucky Brands’ overall break-even in sales dollars?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT