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Crossfire Company segments its business into two regions-East and West. The company prepared a contribution format segmented income statement as shown below: Sales Variable expenses
Crossfire Company segments its business into two regions-East and West. The company prepared a contribution format segmented income statement as shown below: Sales Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses Net operating income Required: Total Company $ 1,040,000 676,000 East $650,000 442,000 364,000 208,000 148,000 216,000 64,000 $144,000 76,000 $ 140,000 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. West $ 390,000 234,000 156,000 84,000 $ 72,000 4. Prepare a new segmented income statement based on the break-even dollar sales that you computed in requirements 2 and 3. What is Crossfire's 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. Req 1 to 3 Req 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 intermediate calculations to 2 decimal places) Dollar sales for the whole company Dollar sales for the East region Dollar sales for the West region Break-Even point Show less A Req 1 to 3 Req 4 Req 5 Prepare a new segmented income statement based on the break-even dollar sales that you computed in requirements 2 and 3. What is Crossfire's net operating income (loss) in your new segmented income statement? Sales Variable expenses Contribution margin Traceable fixed expenses Product line segment margin Total Company East West 0 0 0 0 0 0 Common fixed expenses not traceable to products. Net operating loss S 0
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