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

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

Total Company East West
Sales $ 900,000 $ 600,000 $ 300,000
Variable expenses 675,000 480,000 195,000
Contribution margin 225,000 120,000 105,000
Traceable fixed expenses 141,000 50,000 91,000
Segment margin 84,000 $ 70,000 $ 14,000
Common fixed expenses 59,000
Net operating income $ 25,000

Required:

1. Compute the companywide break-even point in dollar sales. (Round intermediate calculations to 2 decimal places.)

2. Compute the break-even point in dollar sales for the East region. (Round intermediate calculations to 2 decimal places.)

3. Compute the break-even point in dollar sales for the West region. (Round intermediate calculations to 2 decimal places.)

4. Prepare a new segmented income statement based on the break-even dollar sales that you computed in requirements 2 and 3.

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
No

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