Petteway Corporation has two divisions: Home Division and Commercial Division.The following report is for the most recent operating period: The common fixed expenses have been allocated to the divisions on the basis of sales.
Required:
a.What is the Home Division's break-even in sales dollars?
b.What is the Commercial Division's break-even in sales dollars?
c.What is the company's overall break-even in sales dollars?

a.Home Division break-even:
Segment CM ratio = Segment contribution margin ÷ Segment sales
= $215,940 ÷ $354,000 = 0.610
Dollar sales for a segment to break even = Traceable fixed expenses ÷ Segment CM ratio
= $152,000 ÷ 0.610 = $249,180
b.Commercial Division break-even:
Segment CM ratio = Segment contribution margin ÷ Segment sales
= $243,600 ÷ $348,000 = 0.700
Dollar sales for a segment to break even = Traceable fixed expenses ÷ Segment CM ratio
= $173,000 ÷ 0.700 = $247,143
c.The company's overall break-even sales:
CM ratio = Contribution margin ÷ Sales
= $459,540 ÷ $702,000 = 0.655 (rounded)
Total fixed expenses = Total traceable fixed expenses + Common fixed expenses
= $325,000 + $77,220 = $402,220
Dollar sales to break even = Total fixed expenses ÷ CM ratio
= $402,220 ÷ 0.655 = $614,437 (using the unrounded CM ratio)