Product Line

Total Company Weedban

Sales $ 300,000.00 $ 90,000.00
Variable Expenses 183,000.00 36,000.00
Contribution Margin 117,000.00 54,000.00
Traceable Fixed Expenses 66,000.00 45,000.00
Product Line Segment Margin 51,000.00 9,000.00
Common Fixed Expenses Not Traceable to Products 33,000.00
Net Operating Income $ 18,000.00
uct Line
Greengrow
$ 210,000.00
147,000.00
63,000.00
21,000.00
$ 42,000.00
1 Segment Margin $ 120,000.00
Common Fixed Expenses 50,000
Total Fixed Expenses $ 170,000.00

Contribution Margin $ 240,000.00

Sales 600,000
CM Ratio $ 0.40
Dollar Sales for Company to Break-even $ 425,000.00

2 Traceable Fixed Expenses $ 60,000.00

Contribution Margin $ 120,000.00
Sales 400,000
CM Ratio $ 0.30
Dollar Sales for North Segment to Break-even $ 200,000.00

3 Traceable Fixed Expenses $ 60,000.00

Contribution Margin $ 120,000.00
Sales 200,000
CM Ratio $ 0.60
Dollar Sales for South Segment to Break-even $ 100,000.00
1 Divisi
Total Company East
Sales $ 1,000,000.00 $ 250,000.00
Variable Expenses 390,000.00 130,000.00
Contribution Margin 610,000.00 120,000.00
Traceable Fixed Expenses 535,000.00 160,000.00
Divisional Segment Margin 75,000.00 $ (40,000.00)
Common Fixed Expenses Not Traceable to Divisions 90,000.00
Net Operating Loss $ (15,000.00)

2 Revised Sales $ 420,000

Variable Expense 168,000
Contribution Margin $ 252,000
Advertising 15,000
Revised Traceable Fixed Expenses 190,000
Net Operating Income $ 62,000
Division Segment Margin 35,000
Net Operating Income will increase $ 27,000
 Division
Central West
$ 400,000.00 $ 350,000.00
120,000.00 140,000.00
280,000.00 210,000.00
200,000.00 175,000.00
$ 80,000.00 $ 35,000.00
1 Fixed Expenses $ 189,000.00
Contribution Margin $ 225,000.00
Sales $ 450,000.00
CM Ratio $ 0.50
Break-even Point in Dollar Sales $ 378,000.00

Fixed Expenses $ 78,000.00

Contribution Margin $ 105,000.00
Sales $ 150,000.00
CM Ratio $ 0.70
Chicago Office Break-even Point In Dollar Sales $ 111,428.57

Fixed Expenses $ 48,000.00

Contribution Margin $ 120,000.00
Sales $ 300,000.00
CM Ratio $ 0.40
Minneapolis Office Break-even Point In Dollar Sales $ 120,000.00

The companywide break-even point is greater than the sum of the Chicago and Minneapolis break-eve
companywide break-even point, it takes into account the common fixed expenses, while on the other
 The companywide break-even point is greater than the sum of the Chicago and Minneapolis break-eve
companywide break-even point, it takes into account the common fixed expenses, while on the other

2 Increase in Sales $ 75,000.00

Minneapolis CM Ratio $ 0.40
Net Operating Income $ 30,000.00
and Minneapolis break-even points. The reason is that, as for the
penses, while on the other hand, it doesn't affect the segment break-even.
 Total Company
3
a. Amount %
Sales $ 500,000.00 100.00
Variable Expenses 240,000.00 48.00
Contribution Margin 260,000.00 52.00
Traceable Fixed Expenses 126,000.00 25.20
Office Segment Margin 134,000.00 26.80
Common Fixed Expenses Not Traceable to Segments 63,000.00 12.60
Net Operating Income $ 71,000.00 14.20

b According to the income statement, Chicago's sales have increased by $50,000, changing the segment
 Segments
Chicago Minneapolis
Amount % Amount %
$ 200,000.00 100.00 $ 300,000.00 100.00
60,000.00 30.00 180,000.00 60.00
140,000.00 70.00 120,000.00 40.00
78,000.00 39.00 48,000.00 16.00
$ 62,000.00 31.00 $ 72,000.00 24.00

hanging the segment margin ratio.

1 Sales $ 240,000.00
Variable Expenses 153,600.00
Contribution Margin 86,400.00
Traceable Fixed Expenses 17,000.00
Market Segment Margin 69,400.00
Market Segment Margin before AD 60,000.00
Company Profit (Increased) - Medical $ 9,400.00

2 Sales $ 135,000.00
Variable Expenses 70,200.00
Contribution Margin 64,800.00
Traceable Fixed Expenses 26,000.00
Market Segment Margin 38,800.00
Market Segment Margin before AD 27,000.00
Company Profit (Increased) - Dental $ 11,800.00

3 The company should focus its advertising campaign on the Dental market.

4 A portion of the $48,000 in the traceable fixed expense is included in the common fixed cost, which is
mon fixed cost, which is why only $33,000 is stated.