Problem -
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
|
$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 dollar sales for the North region.
3. Compute the break-even point in dollar sales for the South region.