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	$	975,000		$	650,000		$	325,000
Variable expenses		731,250			520,000			211,250
Contribution margin		243,750			130,000			113,750
Traceable fixed expenses		139,000			55,000			84,000
Segment margin		104,750		$	75,000		$	29,750
Common fixed expenses		73,000
Net operating income	$	31,750

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?