Bertie Corporation has two divisions: Retail Division and Wholesale Division. The following data are for the most recent operating period:

Total Company Retail Division Wholesale Division

Sales

$ 608,000

$ 375,000

$ 233.000

Variable expenses

$ 185,530

$ 90,000

$ 95,530

Traceable fixed expenses $ 303,000

$ 217.000

$ 86.000

The common fixed expenses of the company are $103,360.

The Retail Division's break-even sales is closest to:

O $369,408

O $421,526

O $584,815

O $285,526

To determine the break-even sales for the Retail Division, we need to calculate its contribution margin and then use it to find the break-even point.

### Step 1: Contribution Margin for the Retail Division
The contribution margin (CM) is calculated as follows:
\[
\text{Contribution Margin} = \text{Sales} - \text{Variable Expenses}
\]

For the Retail Division:
\[
\text{CM} = 375,000 - 90,000 = 285,000
\]

### Step 2: Contribution Margin Ratio (CM Ratio)
The CM ratio is the contribution margin divided by the sales for the Retail Division:
\[
\text{CM Ratio} = \frac{\text{Contribution Margin}}{\text{Sales}} = \frac{285,000}{375,000} = 0.76
\]

### Step 3: Break-even Sales for the Retail Division
The break-even sales can be found by dividing the traceable fixed expenses for the Retail Division by the CM ratio:
\[
\text{Break-even Sales} = \frac{\text{Traceable Fixed Expenses}}{\text{CM Ratio}}
\]

For the Retail Division:
\[
\text{Break-even Sales} = \frac{217,000}{0.76} \approx 285,526
\]

### Answer
The Retail Division's break-even sales is closest to **$285,526**.

---

Do you want more details or have any questions?

Here are 5 related questions that may expand your understanding:
1. How would the break-even point change if variable expenses increased?
2. What impact do common fixed expenses have on each division’s profitability?
3. How is the contribution margin ratio useful in break-even analysis?
4. What would happen to the break-even sales if sales for the Retail Division increased?
5. How would the overall company break-even point differ from the divisional one?

**Tip:** Remember, the contribution margin ratio helps assess how much each dollar of sales contributes toward covering fixed expenses.

Bertie Corporation has two divisions: Retail Division and Wholesale Division. The following data are for the most recent operating period:

Total Company   Retail Division   Wholesale Division

Sales
$ 608,000
$ 375,000
$ 233,000

Variable expenses
$ 185,530
$ 90,000
$ 95,530

Traceable fixed expenses
$ 303,000
$ 217,000
$ 86,000

The common fixed expenses of the company are $103,360.

The Retail Division's break-even sales is closest to:

O $369,408
O $421,526
O $584,815
O $285,526

Determine the break-even sales for the Retail Division of Bertie Corporation using break-even analysis and contribution margin. This solution covers the calculation of the contribution margin, contribution margin ratio, and break-even point for divisional financial analysis.

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