The document discusses financial data for Phong Corporation which has two divisions. It states the company's common fixed expenses total $102,340. Based on the sales and expenses provided for each division, the calculation shows the company's overall break-even sales is closest to $584,762.
Phong Corporation has two divisions- Consumer Division and Business Di.docx
1. Phong Corporation has two divisions: Consumer Division and Business Division. The following
data are for the most recent operating period: The company's common fixed expenses total
$102,340. The company's overall break-even sales is closest to: $412,314 $584,762 $544,679
$172,448
Solution
Contribution = Sales - Varible Expenses
= (267000+335000) - (152190+73700)
= $376110
PV Ratio = Contribution / Sales * 100
= 376110/602000*100
= 62.48%
Break Even Sales = Fixed Cost/ PV Ratio
= (72000+191000+102340)/ 0.6248
= $584762 Approx.