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	$	960,000		$	640,000		$	320,000
Variable expenses		672,000			480,000			192,000
Contribution margin		288,000			160,000			128,000
Traceable fixed expenses		158,000			69,000			89,000
Segment margin		130,000		$	91,000		$	39,000
Common fixed expenses		70,000
Net operating income	$	60,000

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?