{"id":234748,"date":"2025-06-14T12:16:05","date_gmt":"2025-06-14T12:16:05","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=234748"},"modified":"2025-06-14T12:16:08","modified_gmt":"2025-06-14T12:16:08","slug":"delisa-corporation-has-two-divisions","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/06\/14\/delisa-corporation-has-two-divisions\/","title":{"rendered":"Delisa Corporation has two divisions"},"content":{"rendered":"\n<p><br>Delisa Corporation has two divisions: Division L and Division Q. Data from the most recent month appear below: Total Company Division L Division Q Sales<br>170,000<br>27,100<br>97,990 The break-even in sales dollars for Division Q is closest to:<\/p>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-1-color\">The Correct Answer and Explanation is:<\/mark><\/strong><\/p>\n\n\n\n<p>To calculate the break-even sales in dollars for <strong>Division Q<\/strong>, it is necessary to know the <strong>contribution margin ratio<\/strong> or the relevant <strong>fixed and variable costs<\/strong>. However, the only information provided includes <strong>sales values<\/strong> for the total company, Division L, and Division Q:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Total Sales<\/strong>: $170,000<\/li>\n\n\n\n<li><strong>Division L Sales<\/strong>: $27,100<\/li>\n\n\n\n<li><strong>Division Q Sales<\/strong>: $97,990<\/li>\n<\/ul>\n\n\n\n<p>This implies that Division Q makes up a significant portion of the company&#8217;s total sales. But to determine the break-even point in dollars, additional data is typically required such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Fixed expenses for Division Q<\/strong><\/li>\n\n\n\n<li><strong>Variable expenses or contribution margin for Division Q<\/strong><\/li>\n<\/ul>\n\n\n\n<p>If it is assumed that the company operates at break-even overall and only those three numbers are used, then the break-even can be allocated <strong>proportionally<\/strong> based on the sales ratio of Division Q.<\/p>\n\n\n\n<p><strong>Step-by-step estimation using proportional method:<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Sales Proportion of Division Q<\/strong><br>= Division Q Sales \u00f7 Total Sales<br>= $97,990 \u00f7 $170,000 \u2248 <strong>0.5764<\/strong> (or 57.64%)<\/li>\n\n\n\n<li>If the <strong>company-wide break-even sales<\/strong> is assumed to be the <strong>total sales<\/strong> (i.e., $170,000), and that both divisions break even proportionally to their sales contributions, then: <strong>Estimated Break-even Sales for Division Q<\/strong><br>= 0.5764 \u00d7 $170,000<br>\u2248 <strong>$97,988<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Therefore, the break-even in sales dollars for Division Q is <strong>closest to $97,990<\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Explanation:<\/h3>\n\n\n\n<p>The break-even point represents the level of sales at which a division or business covers all of its fixed and variable costs, resulting in <strong>zero net profit or loss<\/strong>. If detailed cost data are unavailable, and a company is said to be breaking even as a whole, an approximate method is to distribute the break-even sales total across divisions in proportion to their contribution to total sales. Division Q, contributing about 57.64% of sales, would then require approximately $97,990 in sales to break even under this assumption. This approximation assumes similar cost structures across divisions, which may not reflect reality but is suitable for high-level estimation.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/learnexams.com\/blog\/wp-content\/uploads\/2025\/06\/learnexams-banner8-485.jpeg\" alt=\"\" class=\"wp-image-234749\"\/><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Delisa Corporation has two divisions: Division L and Division Q. Data from the most recent month appear below: Total Company Division L Division Q Sales170,00027,10097,990 The break-even in sales dollars for Division Q is closest to: The Correct Answer and Explanation is: To calculate the break-even sales in dollars for Division Q, it is necessary [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-234748","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/234748","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=234748"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/234748\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=234748"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=234748"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=234748"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}