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	$	800,000		$	600,000		$	200,000
Variable expenses		560,000			480,000			80,000
Contribution margin		240,000			120,000			120,000
Traceable fixed expenses		144,000			72,000			72,000
Segment margin		96,000		$	48,000		$	48,000
Common fixed expenses		63,000
Net operating income	$	33,000

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