Grades for Olivia Madison E Chapter 6 Homework O ezto.mheducation.com/hm.tpx Pie

Question

Grades for Olivia Madison E Chapter 6 Homework O ezto.mheducation.com/hm.tpx Piedmont Company segments its business into two regions North and South. The company prepared the contribution format segmented income statement shown below Total Sales $600,000$400,000 $200,000 Variable expenses 360,000 280,000 80,000 Contribution margin 240,000 120,000 120,000 60,00060,000 Traceable fixed expenses Segment margin Common fixed expenses Net operating income 120,000 120,000 S 60,000 60,000 50,000 s 70,000 Required: 1. Compute the companywide break-even point in dollar sales Dollar sales for company to break even f

Explanation / Answer

Break-Even point in Dollar sales

Break-Even pint in Dollar sales

= [ (Traceable fixed expenses + Common fixed expenses)] / Contribution margin ratio

= [ ( $ 120000 + $ 50000) ] / 40%

= $ 170000 / 40%

= $ 425000

The break-even point for the North region

= Segment traceable fixed expenses / Segment CM ratio

= $ 60000 /30%

= $ 200000

The break-even point for the South region

= Segment traceable fixed expenses / Segment CM ratio

= $ 60000 /60%

= $ 100000

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