Neelon Corporation has two divisions: Southern Division and Northern Division. T
ID: 2400867 • Letter: N
Question
Neelon Corporation has two divisions: Southern Division and Northern Division. The following data are for the most recent operating period: Sales Variable expenses Traceable fixed expenses Common fixed expense Total Southern Northern Company Division Division $283,300 $173,700 $109,600 $ 97,873 57,321 40,552 $141,200 55,800 $ 85,400 $ 56,660 34,740 $ 21,920 The common fixed expenses have been allocated to the divisions on the basis of sales. The Northern Division's break-even sales is closest to:Explanation / Answer
contribution for northern division = 109600-40552=69048
CM ratio = contribution /sales
= 69048/109600
= .63
BEP = fixed cost /CM ratio
= 85400 / .63
= $ 135556
correct option is " D"