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8 Crossfire Company segments its business into two regions -East and West. The company prepared the contribution format segmented income statement shown below: Sales Variable

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Crossfire Company segments its business into two regions -East and West. The company prepared the contribution format segmented income statement shown below: Sales Variable expenses Total Company $ 975,000 682,500 East $650,000 487,500 West $325,000 195,000 Contribution margin Traceable fixed expenses 292,500 156,000 162,500 130,000 68,000 188,000 Segment margin 136,500 $ 94,500 $ 42,000 Common fixed expenses 60,000 Net operating income $ 76,500 Required: 1. Compute the companywide break-even point in dollar sales, (Round Intermediate calculations to two decimal places.) Break-even point in dollar sales 2. Compute the break-even point in dollar sales for the East region (Round intermediate calculations to two decimal places.) Break-even point in dollar sales 3. Compute the break-even point in dollar sales for the West region (Round Intermediate calculations to two decimal places.) Break-even point in dollar sales 4. Prepare a new segmented income statement based on the break-even dollar sales that you computed in requirements 2 and 3. (Round Intermediate calculations to two decimal places.) Total Company East West 5. Do you think that Crossfire should allocate its common fixed expenses to the East and West regions when computing the break-even points for each region? Yes NO

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