Gulinson Corporation has two divisions: Division A and Division

b. Data from the most recent month appear below: Total CompanyDivision A Division B Sales$591,000$222,000 $369,000 Variable expenses 275,580 113,220 162,360 Contribution margin 315,420 108,780 206,640 Traceable fixed expenses 195,000 66,000 129,000 Segment margin 120,420$42,780 $77,640 Common fixed expenses 65,010 Net operating income$55,410

(1) 0.53, 0.49, 0.56 (2) $367,924.53, $134,694, $230,357 (3) $12,630 (4) $691,000

Explanation:

The question is not complete, here is the missing part of the question

Required

1 . Calculate contribution margin % for the company as a whole and per segment

2 Calculate the breakeven point in sales dollars for the company overall and for each segment

3 what would the net income/ loss be if you discontinue Division A

4 what would be the target sale for the company to increase operating income to $100,000

Here is the solution

1 . To calculate the contribution margin for the company

= Total contribution ÷ Total Sales

= 315,420 ÷ 591,000

=0.53

Contribution margin per segment

= Segment contribution ÷ Segment Sales

A = 108,780 ÷ 222,000

= 0.49

B = 206,640 ÷ 369,000

= 0.56

(2) To calculate the break even point in sales dollars for the company overall and for each segment

Overall = Total traceable fixed expenses ÷ Total contribution ratio

= 195,000 ÷ 0.53

= $369,924.53

For segment

A = segment traceable fixed expenses ÷ segment contribution margin ratio

= 66,000 ÷ 0.49

=$134,694

B = 129,000 ÷ 0.56

= $230,357

(3) The net income / loss if Division A was discontinued

Sales. 369,000

Less: variable expenses. 162,360

Contribution margin. 206,640

Less: Traceable fixed expenses. 129,000

Segment margin. 77,640

Less: Common fixed expenses. 65,010

Net operating income. 12,630

(4) To calculate the target sales to increase operating income to $100,000

Existing sales. 591,000

Add: increase in operating income 100,000

Sales target. 691,000

1. Calculate contribution margin % for the company as a whole and per segment

2. Calculate the break even point in sales dollars for the company overall and for each segment

3. what would the net income/ loss be if you discontinue Division A

4. what would be the target sale for the company to increase operating income to $100,000

Explanation:

                                  Total Company         Division A        Division B

Sales                                $591,000              $222,000      $369,000

Variable expenses         $275,580                $113,220       $162,360

Contribution margin        $315,420               $108,780       $206,640

Traceable fixed exp.       $195,000                $66,000       $129,000

Segment margin             $120,420                 $42,780         $77,640

Common fixed exp.          $65,010

Net operating income      $55,410

contribution margin ratio:

company = $315,420 / $591,000 = 0.5337 or 53.37%

Div. A = $108,780 / $222,000 = 0.49 or 49%

Div. B = $206,640 / $369,000 = 0.56 or 56%

break even point:

company = ($195,000 + $65,010) / 0.5337 = $487,184

Div. A = $66,000 / 0.49 = $134,694

Div. B = $129,000 / 0.56 = $230,357

if division A is discontinued:

gain/loss = total sales - variable costs - traceable fixed costs - common fixed costs = $369,000 - $162,360 - $129,000 - $65,010 = $12,630

to increase operating income to $100,000:

the total increase in operating income = target operating income - current operating income = $100,000 - $55,410 = $44,590

to increase operating income by $44,590, you need to increase total sales by = $44,590 / 0.5337 = $83,549 + $591,000 = $674,549

answer; tech (a) is correct;

answer; by looking at total product,marginal product,and changes in both after changes in inputs