Hatch Company has two divisions, O and E. During the year just ended, Division O had a segment margin of $9,000 and variable expenses equal to 70% of sales. Traceable fixed expenses for Division E were $19,000. Hatch Company as a whole had a contribution margin ratio of 40%, a segment margin of $25,000, and sales of $200,000. Given this data, the sales for Division E for last year were:

	$150,000
	$87,500
→	$50,000

	Total	O	E
Sales	$200,000
Variable expenses
Contribution margin
Traceable fixed expenses			19,000
Segment margin	25,000	$9,000	?
Common fixed expenses
Net operating income

E segment margin = Total segment margin - O segment margin = $25,000 - $9,000 = $16,000

	Total	O	E
Sales	$200,000
Variable expenses
Contribution margin			?
Traceable fixed expenses			19,000
Segment margin	25,000	$9,000	$16,000
Common fixed expenses
Net operating income

E segment margin = E contribution margin - E traceable expenses

E contribution margin = E segment margin + E traceable expenses

$16,000 + $19,000 = $35,000

	Total	O	E
Sales	$200,000
Variable expenses
Contribution margin	?		35,000
Traceable fixed expenses			19,000
Segment margin	25,000	$9,000	$16,000
Common fixed expenses
Net operating income

Total contribution margin = Total sales × Total contribution margin ratio = $200,000 × 0.40 = $80,000

	Total	O	E
Sales	$200,000
Variable expenses
Contribution margin	80,000	?	35,000
Traceable fixed expenses			19,000
Segment margin	25,000	$9,000	$16,000
Common fixed expenses
Net operating income

Total contribution margin = O contribution margin + E contribution margin

O contribution margin = Total contribution margin - E contribution margin = $80,000 - $35,000 = $45,000

	Total	O	E
Sales	$200,000	?
Variable expenses
Contribution margin	80,000	45,000	35,000
Traceable fixed expenses			19,000
Segment margin	25,000	$9,000	$16,000
Common fixed expenses
Net operating income

O CM ratio = 1 - O variable expense ratio = 1 - $0.70 = 0.30

O contribution margin = O CM ratio × O sales

$45,000 = 0.30 × O sales

O sales = $45,000 ÷ 0.30 = $150,000

	Total	O	E
Sales	$200,000	$150,000	?
Variable expenses
Contribution margin	80,000	45,000	35,000
Traceable fixed expenses			19,000
Segment margin	25,000	$9,000	$16,000
Common fixed expenses
Net operating income

Total sales = O sales + E sales

E sales = Total sales - O sales = $200,000 - $150,000 = $50,000