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|
|Traceable fixed expenses||286,000||239,000||47,000|
|Common fixed expenses||73,080|
|Net operating income||$||2,250|
The company’s overall break-even sales is closest to:
Overall contribution margin = $361,330
Overall sales = $522,000
Overall contribution margin ratio = Overall contribution margin/ Overall sales
Total fixed costs of the company = Traceable fixed expenses + Common fixed expenses
Overall break even sales = Total fixed costs of the company / Overall contribution margin ratio
The company’s overall break-even sales is closest to $518,750.
Correct option is C.
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