Neelon Corporation has two divislons Southern Division and N

Neelon Corporation has two divislons: Southern Division and Northern Division. The following data are for the most recent operating perlod: Sale Variable expenses Traceable fixed expenses Common fixed expense Total Southern Northern Company Division Division $297,800 $167,900 $129,900 $108,887 62,123 46,764 $159,000 60,500 $ 98,500 $59,560 33,580 25,98 The common fixed expenses have been allocated to the divislons on the basis of sales. The Northern DIvision\'s break-even sales is closest to Multiple Choice $149,333 $139,357 $153,906 $190,571

Solution

Contribution Margin Ratio for the Northern Division = (Sales for the Norther Division - Variable Cost for the Northern Division) / Sales for the Northern Division *100

= ( $ 129,900 - $ 46,764) / $129,900 * 100   

= 64%

The Break Even Sales for Northern Division = Traceable Fixed Expense for the Northern Division / Contribution Margin Ratio for the Northern Division

= $ 98,500 / 64%

= $ 153,906.25

Hence the correct answer is $ 153,906