Asked by makayla porter on Jul 01, 2024
Verified
The Retail Division's break-even sales is closest to:
A) $369,408
B) $421,526
C) $584,815
D) $285,526
Break-Even Sales
The amount of revenue needed to cover all fixed and variable costs, resulting in a net income of zero.
Retail Division
A segment of a company that directly sells products to consumers, typically involving activities and costs related to retail operations.
- Gain insight into the theory and mathematical determination of break-even sales for an enterprise or its departments.
Verified Answer
HM
Hammad Mughal7 days ago
Final Answer :
D
Explanation :
Segment contribution margin = Segment sales - Segment variable expenses
= $375,000 - $90,000 = $285,000
Segment CM ratio = Segment contribution margin ÷ Segment sales
= $285,000 ÷ $375,000 = 0.760
Dollar sales for a segment to break even = Traceable fixed expenses ÷ Segment CM ratio
= $217,000 ÷ 0.760 = $285,526
= $375,000 - $90,000 = $285,000
Segment CM ratio = Segment contribution margin ÷ Segment sales
= $285,000 ÷ $375,000 = 0.760
Dollar sales for a segment to break even = Traceable fixed expenses ÷ Segment CM ratio
= $217,000 ÷ 0.760 = $285,526
Learning Objectives
- Gain insight into the theory and mathematical determination of break-even sales for an enterprise or its departments.
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