Asked by Gloria Martin-Mays on Jul 01, 2024
Verified
The Consumer Division's break-even sales is closest to:
A) $215,942
B) $268,710
C) $488,153
D) $307,768
Break-even Sales
The level of sales at which a business generates revenue exactly equal to its costs, resulting in no profit or loss.
Consumer Division
A segment within a company focused on selling products and services directly to consumers, as opposed to business or commercial clients.
- Achieve a thorough understanding of break-even analysis in a business setting.
Verified Answer
AK
Amber Kimmich7 days ago
Final Answer :
A
Explanation :
Segment contribution margin = Segment sales - Segment variable expenses
= $331,000 - $102,610 = $228,390
Segment CM ratio = Segment contribution margin ÷ Segment sales
= $228,390 ÷ $331,000 = 0.690
Dollar sales for a segment to break even = Traceable fixed expenses ÷ Segment CM ratio
= $149,000 ÷ 0.690 = $215,942
= $331,000 - $102,610 = $228,390
Segment CM ratio = Segment contribution margin ÷ Segment sales
= $228,390 ÷ $331,000 = 0.690
Dollar sales for a segment to break even = Traceable fixed expenses ÷ Segment CM ratio
= $149,000 ÷ 0.690 = $215,942
Learning Objectives
- Achieve a thorough understanding of break-even analysis in a business setting.