Crossfire Company segments its business into two regionsEast and West. The company prepared a contribution format segmented income statement as shown below:

	Total Company	East	West
Sales	$ 990,000	$ 660,000	$ 330,000
Variable expenses	742,500	528,000	214,500
Contribution margin	247,500	132,000	115,500
Traceable fixed expenses	147,000	56,000	91,000
Segment margin	100,500	$ 76,000	$ 24,500
Common fixed expenses	65,000
Net operating income	$ 35,500

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 Crossfires 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?