8) Nuzum Corporation has two divisions: Division M and Division N. Data from the

Question

8) Nuzum Corporation has two divisions: Division M and Division N. Data from the most recent month appear below 8) Total Company Division M Division N 557,000 S 254,000 303,000 63.630 239,370 Sales Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses Net operating income 144,910 81,280 412,090 172,720 273.000 128,000 139,090 44,720 94,690 43,180 94,370 51,510 S 44,400 S 1540 S 42,860 Management has allocated common fixed expenses to the Divisions based on their D) $183,544 sales. The break-even in sales dollars for Division N is closest to: A) $496,987 B) S303,405 C) $248,747

Explanation / Answer

Answer : D.

Break even to sales dollars = Fixed expenses / Contribution margin ratio

= $145000 / ($239370 / $303000)

= $145000 / 0.79

= $183544.

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