Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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 $ 945,000 $ 630,000 $ 315,000 Variable expenses 756,000 529,200 226,800 Contribution margin 189,000 100,800 88,200 Traceable fixed expenses 115,000 52,000 63,000 Segment margin 74,000 $ 48,800 $ 25,200 Common fixed expenses 62,000 Net operating income $ 12 , 000 Required: 1. Compute the companywide breakeven point in dollar sales. 2. Compute the breakeven 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 breakeven dollar sales that you computed in requirements 2 and 3. What is Crossfire's net operating income (loss) in your new segmented income statement? . 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? 01 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 Show lessA Break-Even polnt Dollar sales for the whole company Dollar sales for the East region Dollar sales for the West region 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? Total Company East West Sales Variable expenses Contribution margin Traceable fixed expenses Product line segment margin Common fixed expenses not traceable to products Net operating loss 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? OYes ONO
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started