Question
In: Accounting
Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format...
|
Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format segmented income statement shown below: |
|
Total Company |
North | South | ||||
| Sales | $ | 1,156,250 | $ | 925,000 | $ | 231,250 |
| Variable expenses | 786,250 | 740,000 | 46,250 | |||
| Contribution margin | 370,000 | 185,000 | 185,000 | |||
| Traceable fixed expenses | 156,000 | 78,000 | 78,000 | |||
| Segment margin | 214,000 | $ | 107,000 | $ | 107,000 | |
| Common fixed expenses | 68,000 | |||||
| Net operating income | $ | 146,000 | ||||
| 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. (Round your break-even dollar sales to the nearest whole number.) |
Solutions
Expert Solution
Answer of Part 1:
Total Fixed Expense = Traceable Fixed Expenses + Common Fixed
Expenses
Total Fixed Expense = $156,000 + $68,000
Total Fixed Expense = $224,000
Contribution Margin Ratio = Contribution Margin / Sales
Contribution Margin Ratio = $370,000 / $1,156,250
Contribution Margin Ratio = 0.32
Break Even in Dollar Sales = Total Fixed Expense / Contribution
Margin Ratio
Break Even in Dollar Sales = $224,000 / 0.32
Break Even in Dollar Sales = $700,000
Answer of Part 2:
Contribution Margin Ratio = Contribution Margin / Sales
Contribution Margin Ratio = $185,000 / $925,000
Contribution Margin Ratio = 0.2
Break Even Point in Dollar Sales = Fixed Expense/ Contribution
Margin Ratio
Break Even Point in Dollar Sales = $78,000 / 0.2
Break Even Point in Dollar Sales = $390,000
Answer of Part 3:
Contribution Margin Ratio = Contribution Margin / Sales
Contribution Margin Ratio = $185,000 / $231,250
Contribution Margin Ratio = 0.8
Break Even Point in Dollar Sales = Fixed Expense/ Contribution
Margin Ratio
Break Even Point in Dollar Sales = $78,000 / 0.8
Break Even Point in Dollar Sales = $97,500
ekkarill92 answered 1 year agoRelated Solutions
Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format...
Piedmont Company segments its business into two regions—North
and South. The company prepared the contribution format segmented
income statement as shown:
Total Company
North
South
Sales
$
937,500
$
750,000
$
187,500
Variable expenses
637,500
600,000
37,500
Contribution margin
300,000
150,000
150,000
Traceable fixed expenses
142,000
71,000
71,000
Segment margin
158,000
$
79,000
$
79,000
Common fixed expenses
62,000
Net operating income
$
96,000
Required:
1. Compute the companywide break-even point in dollar sales.
2. Compute the break-even point in...
Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format...
Piedmont Company segments its business into two regions—North
and South. The company prepared the contribution format segmented
income statement as shown:
Total Company
North
South
Sales
$
937,500
$
750,000
$
187,500
Variable expenses
637,500
600,000
37,500
Contribution margin
300,000
150,000
150,000
Traceable fixed expenses
152,000
76,000
76,000
Segment margin
148,000
$
74,000
$
74,000
Common fixed expenses
64,000
Net operating income
$
84,000
Required:
1. Compute the companywide break-even point in dollar sales.
2. Compute the break-even point in...
Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format...
Piedmont Company segments its business into two regions—North
and South. The company prepared the contribution format segmented
income statement as shown:
Total Company
North
South
Sales
$
937,500
$
750,000
$
187,500
Variable expenses
637,500
600,000
37,500
Contribution margin
300,000
150,000
150,000
Traceable fixed expenses
152,000
76,000
76,000
Segment margin
148,000
$
74,000
$
74,000
Common fixed expenses
64,000
Net operating income
$
84,000
Required:
1. Compute the companywide break-even point in dollar sales.
2. Compute the break-even point in...
Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format...
Piedmont Company segments its business into two regions—North
and South. The company prepared the contribution format segmented
income statement shown below:
Total
Company
North
South
Sales
$
812,500
$
650,000
$
162,500
Variable expenses
552,500
520,000
32,500
Contribution margin
260,000
130,000
130,000
Traceable fixed expenses
134,000
67,000
67,000
Segment margin
126,000
$
63,000
$
63,000
Common fixed expenses
54,000
Net operating income
$
72,000
Required:
1. Compute the companywide break-even point in dollar sales.
2. Compute the break-even point in...
Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format...
Piedmont Company segments its business into two regions—North
and South. The company prepared the contribution format segmented
income statement as shown:
Total Company
North
South
Sales
$
825,000
$
550,000
$
275,000
Variable expenses
495,000
385,000
110,000
Contribution margin
330,000
165,000
165,000
Traceable fixed expenses
144,000
72,000
72,000
Segment margin
186,000
$
93,000
$
93,000
Common fixed expenses
64,000
Net operating income
$
122,000
Required:
1. Compute the companywide break-even point in dollar sales.
2. Compute the break-even point in...
Crossfire Company segments its business into two regions—East and West. The company prepared a contribution format...
Crossfire Company segments its business into two regions—East
and West. The company prepared a contribution format segmented
income statement as shown below:
Total Company
East
West
Sales
$
900,000
$
600,000
$
300,000
Variable expenses
675,000
480,000
195,000
Contribution margin
225,000
120,000
105,000
Traceable fixed expenses
141,000
50,000
91,000
Segment margin
84,000
$
70,000
$
14,000
Common fixed expenses
59,000
Net operating income
$
25,000
Required:
1. Compute the companywide break-even point in dollar sales.
2. Compute the break-even point...
Crossfire Company segments its business into two regions—East and West. The company prepared a contribution format...
Crossfire Company segments its business into two regions—East
and West. The company prepared a contribution format segmented
income statement as shown below:
Total Company
East
West
Sales
$
1,120,000
$
770,000
$
350,000
Variable expenses
840,000
616,000
224,000
Contribution margin
280,000
154,000
126,000
Traceable fixed expenses
155,000
65,000
90,000
Segment margin
125,000
$
89,000
$
36,000
Common fixed expenses
70,000
Net operating income
$
55,000
Required:
1. Compute the companywide break-even point in dollar sales.
2. Compute the break-even point...
Crossfire Company segments its business into two regions—East and West. The company prepared a contribution format...
Crossfire Company segments its business into two regions—East
and West. The company prepared a contribution format segmented
income statement as shown below:
Total Company
East
West
Sales
$
975,000
$
650,000
$
325,000
Variable expenses
731,250
520,000
211,250
Contribution margin
243,750
130,000
113,750
Traceable fixed expenses
139,000
55,000
84,000
Segment margin
104,750
$
75,000
$
29,750
Common fixed expenses
73,000
Net operating income
$
31,750
Required:
1. Compute the companywide break-even point in dollar sales.
2. Compute the break-even point...
Crossfire Company segments its business into two regions—East and West. The company prepared a contribution format...
Crossfire Company segments its business into two regions—East
and West. The company prepared a contribution format segmented
income statement as shown below:
Total Company
East
West
Sales
$
750,000
$
500,000
$
250,000
Variable expenses
525,000
375,000
150,000
Contribution margin
225,000
125,000
100,000
Traceable fixed expenses
140,000
60,000
80,000
Segment margin
85,000
$
65,000
$
20,000
Common fixed expenses
70,000
Net operating income
$
15,000
Required:
1. Compute the companywide break-even point in dollar sales.
2. Compute the break-even point...
Crossfire Company segments its business into two regions—East and West. The company prepared the contribution format...
Crossfire Company segments its business into two regions—East
and West. The company prepared the contribution format segmented
income statement shown below:
Total Company
East
West
Sales
$
1,005,000
$
670,000
$
335,000
Variable expenses
804,000
542,700
261,300
Contribution margin
201,000
127,300
73,700
Traceable fixed expenses
112,000
57,000
55,000
Segment margin
89,000
$
70,300
$
18,700
Common fixed expenses
56,000
Net operating income
$
33,000
Required:
1. Compute the companywide break-even point in dollar sales.
(Round intermediate calculations to two decimal...
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