Jan Van Voorhis is a florist in Sedona, Arizona. Dividing his clients into two major categories, he provides the following income statement. He stresses that, for most florists (including himself), each segment accounts for 50% of total revenues.

Required
a. Suppose Jan allocates common fixed costs equally between the two segments. Treating each segment as a separate business, determine the breakeven revenue for institutional revenues and for retail revenues. Does Jan€™s shop, as a whole, break even with these revenues?
b. Compute Jan€™s Weighted Contribution Margin Ratio using the product mix provided in the problem text. Determine breakeven revenues using this revenue shares.
c. Why do the answers for parts (a) and (b) differ? What key feature of Jan€™s business is not captured in the answer to part (a)? What do you conclude about the wisdom of allocating common costs and performing breakeven analysis separately by segment?
d. When would a firm perform breakeven analysis for asegment?

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Retail Institutional Total $450,000 Revenues Variable cost Contributon margin Traceable fixed costs Segment margin Common fixed costs Profit before taxes 150,000 300,000 175,000 125,000 $450,000 $900,000 420,000 180,000 255,000 00,000 225,000 200,000 $25,000 270,000 18(),000 80,000