Question
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. Total Company $975,000 682,500 292,500 156,000 East $650,000 West $325,000 487,500 195,000 162,500 68,000 130,000 88,000 136,500 $ 94,500 $ 42,000 60,000 $ 76,500 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. 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 41 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)
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