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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.

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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.