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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 expenses
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 Net operating income Total Company $1,050,000 782,500 262,500 152,000 110,500 70.000 5 40,500 Et $ 700,00 560,000 140,000 61, $79.000 st $ 350,000 227.500 132,500 91.00 $ 31,500 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 sates that 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 that 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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