Gough Corporation has two divisions: Domestic and Foreign. Data from the most re

Question

Gough Corporation has two divisions: Domestic and Foreign. Data from the most recent month appear below:

The break-even in sales dollars for the company as a whole is closest to: (Do not round intermediate calculations.)

$615,093

$504,302

$107,583

$437,920

Total Company Domestic Foreign Sales $665,200 $349,800 $315,400 Variable expenses    221,930     73,710 148,220 Contribution margin 443,270 276,090 167,180 Traceable fixed expenses    335,000   206,600 128,400 Segment margin 108,270   $69,490 $38,780 Common fixed expenses      74,880 Net operating income     $33,390

Explanation / Answer

Contribution margin Ratio =  Total Contribution margin / Total Sales *100

= $ 443,270 / $ 665200 *100

= 66.63710162%

break-even in sales dollars = Total Fixed Cost / Contribution margin Ratio

= $ ( 335000 + 74880) /66.63710162%

= $ 409,880 / 66.63710162%

=615,092.78

= $615,093

Hence the correct answer is $ 615,093

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