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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
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 $ 1,140,000 855,000 285,000 144,000 East $ 760,000 West $ 380,000 577,600 182,400 63,000 277,400 102,600 81,000 141,000 72,000 $ 119,400 $ 21,600 $ 69,000 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. 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. Note: Round intermediate calculations to 2 decimal places Req 1 to 3 Req 4 Req 5 1. Compute the companywide break-even point in dollar sale 2. Compute the break-even point in dollar sales for the East 3. Compute the break-even point in dollar sales for the West Note: 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 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 Common fixed expenses not traceable to products Net operating loss Total Company East West 0 0 0 0 0 0 $ 0 < Req 1 to 3 Req 5 > Complete this question by entering your answers in the tabs below. Req 1 to 3 Req 4 Req 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 O No
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