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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: Total West Sales
Crossfire Company segments its business into two regions-East and West. The company prepared a contribution format segmented income statement as shown below: Total West Sales Variable expenses Contribution margin Traceable fixed expenses Segment margirn Common fixed expenses Net operating income Company $ 990,000 742,500 247,500 147,000 100,500 65,000 $ 35,500 East 660,000 528,000 132,000 56,000 $ 330,000 214,500 115,500 91,000 $ 24,500 $ 76,000 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 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 Req4 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) Break-Even point Dollar sales for the whole company Dollar sales for the East region Dollar sales for the West region Req 1 to 3Req 4 Req 5 Prepare a new segmented income statement based on the break-even dollar sales that you comput 3. Use the same format as shown above. What is Crossfire's net operating income (loss) in your ne statement? Total Company East West Req 1 to 3 Req 4Req 5 Do you think that Crossfire should allocate its common fixed expenses to break-even points for each region? Yes ONo
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