Question

Mckissic Corporation has two divisions: Domestic and Foreign. Data from the most recent month appear below: Total Company Domestic Foreign Sales $ 450,000 $ 119,000 $ 331,000 Variable expenses 157,240 38,080 119,160 Contribution margin 292,760 80,920 211,840 Traceable fixed expenses 226,000 57,000 169,000 Segment margin 66,760 $ 23,920 $ 42,840 Common fixed expenses 58,500 Net operating income $ 8,260 The break-even in sales dollars for the company as a whole is closest to:

Answer 1

Answer:

BEP $347,383.5223

Explanation:

becuse we have multiple producets, we have to calclate the CMR including all of them.

$\frac{CM_1 + CM_2}{S_1+S_2} =CMR_{mix}$

292,760 contribution mix

450,000 sales mix

292,760/450,000 = 65.05777% CMR mix

$\frac{Fixed\:Cost}{Contribution \:Margin \:Ratio} = Break\: Even\: Point_{dollars}$

226,000 fixed cost / 0.6505777 = $347,383.5223