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 $ 600,000 $ 400,000 $ 200,000 Variable expenses 360,000 280,000 80,000 Contribution margin 240,000 120,000 120,000 Traceable fixed expenses 120,000 60,000 60,000 Segment margin 120,000 $ 60,000 $ 60,000 Common fixed expenses 50,000 Net operating income $ 70,000 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.
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 $ 600,000 $ 400,000 $ 200,000 Variable expenses 360,000 280,000 80,000 Contribution margin 240,000 120,000 120,000 Traceable fixed expenses 120,000 60,000 60,000 Segment margin 120,000 $ 60,000 $ 60,000 Common fixed expenses 50,000 Net operating income $ 70,000 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 | $ 600,000 | $ 400,000 | $ 200,000 |
| Variable expenses | 360,000 | 280,000 | 80,000 |
| Contribution margin | 240,000 | 120,000 | 120,000 |
| Traceable fixed expenses | 120,000 | 60,000 | 60,000 |
| Segment margin | 120,000 | $ 60,000 | $ 60,000 |
| Common fixed expenses | 50,000 | ||
| Net operating income | $ 70,000 |
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.
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