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Exercise 6-10 (Algo) Companywide and Segment Break-Even Analysis [LO6-5] Crossfire Company segments its business into two regions-East and West. The company prepared a contribution
Exercise 6-10 (Algo) Companywide and Segment Break-Even Analysis [LO6-5] Crossfire Company segments its business into two regions-East and West. The company prepared a contribution format segmented income statement as shown below: Total Company East West Sales $1,040,000 $650,000 $390,000 Variable expenses 676,000 442,000 234,000 Contribution margin 364,000 208,000 Traceable fixed expenses 148,000 Segment margin 216,000 64,000 $144,000 156,000 84,000 $ 72,000 Common fixed expenses 76,000 Net operating income 140,000 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 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? Complete this question by entering your answers in the tabs below. docx katelyn and me.ioa < Prev 19 of 20 Next >
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