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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 Total Company $ 750,000 525,000 225,000 East West $ 500,000 375,000 $ 250,000 150,000 140,000 125,000 60,000 100,000 80,000 85,000 $ 65,000 $ 20,000 70,000 $ 15,000 Net operating income 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 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 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: For all requirements, round intermediate calculations to 2 decimal places. Show less 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: For all requirements, round intermediate calculations to 2 decimal places. Show less Dollar sales for the whole company Dollar sales for the East region Break-Even point Dollar sales for the West region Prepare a new segmented income statement based on the break-even dollar sales 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 $ FA East West 0 0 0 0 0 0 0 Do you think 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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