Neelon Corporation has two divisions: Southern Division and Northern Division. T

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"

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