Piedmont Company segments its business into two regions-North and South. The com

Question

Piedmont Company segments its business into two regions-North and South. The company prepared the contribution format segmented income statement as shown Total Company $825,000 495,000 330,000 Traceable fixed expenses 156,000 174,000 69,000 $105,000 North $550,000 385,000 165,000 78,000 $ 87,000 South $275,000 110,000 165,000 78,000 $ 87,000 Sales Variable expenses Contribution margin Segment margin Common fixed expenses Net operating income Required: 1. Compute the companywide break-even point in dollar sales 2. Compute the break-even point in dollar sales for the North region 3. Compute the break-even point in dollar sales for the South region (For all requirements, round your intermediate calculations to 2 decimal places. Round your final answers to the nearest dollar.) 1. Dollar sales for company to break-even 2. Dollar sales for North segment to break-even 3. Dollar sales for South segment to break-even

Explanation / Answer

1 Contribution margin ratio total = 330000/825000= 40% Break even sales = Fixed costs/CM ratio =(156000+69000)/40%= 562500 2 Contribution margin ratio = 165000/550000= 30% Break even sales = Fixed costs/CM ratio =78000/30%= 260000 3 Contribution margin ratio = 165000/275000= 60% Break even sales = Fixed costs/CM ratio =78000/60%= 130000

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---