Question
Ch7. 7) Crossfire Company segments its business into two regionsEast and West. The company prepared a contribution format segmented income statement as shown below: Total
Ch7. 7) Crossfire Company segments its business into two regionsEast and West. The company prepared a contribution format segmented income statement as shown below:
Total Company East West Sales $ 900,000 $ 600,000 $ 300,000 Variable expenses 675,000 480,000 195,000 Contribution margin 225,000 120,000 105,000 Traceable fixed expenses 141,000 50,000 91,000 Segment margin 84,000 $ 70,000 $ 14,000 Common fixed expenses 59,000 Net operating income $ 25,000
Required:
1. Compute the companywide break-even point in dollar sales.
2. Compute the break-even point in dollar sales for the East region.
3. Compute the break-even point in dollar sales for the West region.
4. Prepare a new segmented income statement based on the break-even dollar sales that you computed in requirements 2 and 3. Use the same format as shown above. What is Crossfires net operating income (loss) in your new segmented income statement?
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?
Complete this question by entering your answers in the tabs below. ces Req 1 to 3 Reg 4 Req 5 1. Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the East region. 3. Compute the break-even point in dollar sales for the West region. (Round your intermediate calculations to 2 decimal places.) Break-Even Point $ 25 Dollar sales Dollar sales for the East region Dollar sales for the West region Wwwwwww Req 4 > Prey 7 of 7 Next Complete this question by entering your answers in the tabs below. Req 1 to 3 Reg 4 Req 5 Prepare a new segmented income statement based on the break-even dollar sales that you computed i 3. Use the same format as shown above. What is Crossfire's net operating income (loss) in your new se statement? (Round your intermediate calculations to 2 decimal places.) Total Company East West 0 0 0 0 0 0 0
Crossfire Company segments its business into two regionsEast and West. The company prepared a contribution format segmented income statement as shown below:
Total Company | East | West | ||||||
Sales | $ | 900,000 | $ | 600,000 | $ | 300,000 | ||
Variable expenses | 675,000 | 480,000 | 195,000 | |||||
Contribution margin | 225,000 | 120,000 | 105,000 | |||||
Traceable fixed expenses | 141,000 | 50,000 | 91,000 | |||||
Segment margin | 84,000 | $ | 70,000 | $ | 14,000 | |||
Common fixed expenses | 59,000 | |||||||
Net operating income | $ | 25,000 | ||||||
Required:
1. Compute the companywide break-even point in dollar sales.
2. Compute the break-even point in dollar sales for the East region.
3. Compute the break-even point in dollar sales for the West region.
4. Prepare a new segmented income statement based on the break-even dollar sales that you computed in requirements 2 and 3. Use the same format as shown above. What is Crossfires net operating income (loss) in your new segmented income statement?
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?
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