Question

Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format segmented income statement as shown below:

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.

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 .....
Common fixed expenses.
120,000
$ 60,000 $ 60,000
50,000
Net operating income. .
$ 70,000
Expand
Transcribed Image Text

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 ..... Common fixed expenses. 120,000 $ 60,000 $ 60,000 50,000 Net operating income. . $ 70,000

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