Swanson Company Has Two Divisions; Sporting Goods and Sports Gear

question 70

Multiple Choice

Swanson Company has two divisions; Sporting Goods and Sports Gear.The sales mix is 65% for Sporting Goods and 35% for Sports Gear.Swanson incurs $4,440,000 in fixed costs.The contribution margin ratio for Sporting Goods is 30%, while for Sports Gear it is 50%.
-What will be the total contribution margin at the break-even point?

• A)$3,820,466
• B)$4,440,000
• C)$4,480,000
• D)$5,160,000

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Definitions:

General Journal

A primary accounting record used to document all business transactions in chronological order.

Indirect Materials

Components used in the manufacturing process that are not directly traceable to a specific product, like lubricants for machines.

Molding Department

A specific division within a manufacturing facility where molding processes—shaping materials into products—are carried out.

Finished Goods Inventory

The stock of completed products that are ready to be sold but have not yet been sold to consumers.