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	$	915,000		$	610,000		$	305,000
Variable expenses		732,000			518,500			213,500
Contribution margin		183,000			91,500			91,500
Traceable fixed expenses		111,000			51,000			60,000
Segment margin		72,000		$	40,500		$	31,500
Common fixed expenses		60,000
Net operating income	$	12,000

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. Use the same format as shown above. 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?

___________________________________________________________________________________________________________________________________________________

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.

(Round intermediate calculations to 2 decimal places.

	Break-Even point
Dollar sales for the whole company
Dollar sales for the East region
Dollar sales for the West region

_________________________________________________________________________________

Prepare a new segmented income statement based on the break-even dollar sales that you computed in requirements 2 and 3. Use the same format as shown above. What is Crossfires net operating income (loss) in your new segmented income statement?

	Total Company	East	West

_____________________________________________________________________________

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?