Carolfi Corporation Has Two Divisions: Division a and Division B

Multiple Choice

Carolfi Corporation has two divisions: Division A and Division B. Data from the most recent month appear below: The break-even in sales dollars for Division A is closest to:

A) $389,524
B) $541,238
C) $230,952
D) $704,261 Division A:
Segment CM ratio = Segment contribution margin ÷ Segment sales
= $155,400 ÷ $370,000 = 0.42
Dollar sales for a segment to break even = Segment traceable fixed expenses ÷ Segment CM ratio
= $97,000 ÷ 0.42 = $230,952