Question

Delisa Corporation has two divisions: Division L and Division Q. Data from the most recent month appear below:Total Company Division L Division QSales $ 541,000 $ 173,000 $ 368,000Variable expenses 323,720 117,640 206,080Contribution margin 217,280 55,360 161,920Traceable fixed expenses 111,910 38,710 73,200Segment margin 105,370 $ 16,650 $ 88,720Common fixed expenses 64,160Net operating income $ 41,210The break-even in sales dollars for Division Q is closest to:

Answer 1

$173,000

Step-by-step explanation:

The point at which a neither a profit or loss is made by a company is known as Break even point.

Break even (Sales dollars)

= Fixed cost / Contribution margin

Given that;

Fixed cost = $38,710

Contribution margin

= $55,360 / $173,000

= 0.32

Therefore,

Break even (Sales dollars)

= $55,360 / 0.32

= $173,000

The break even in sales dollars for Division Q is closest to $173,000