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Exercise 6-10 (Algo) Companywide and Segment Break-Even Analysis [LOG-5] Crossfire Company segments its business into two regionsEast and West. The company prepared a contribution format
Exercise 6-10 (Algo) Companywide and Segment Break-Even Analysis [LOG-5] 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 $ 990,000 $ 660,000 $ 330,000 Variable expenses 742,500 528,000 214,500 Contribution margin 247,500 132,000 115,500 Traceable fixed expenses 147,000 56,000 91,000 Segment margin 100,500 $ 76,000 $ 24,500 Common fixed expenses 65, 000 Net operating income 3 35, 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 sales that you computed in requirements 2 and 3. What is Crossre's net operating income (loss) in your new segmented income statement? 5. Do you think that Crossfire should allocate its common xed 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. Req 1 to 3 Req 4 Req 5 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) Show less A Break-Even point Dollar sales for the whole company Dollar sales for the East region Dollar sales for the West region Req-1 > Complete this question by entering your answers in the tabs below. Req 1 to 3 Req 4 Req 5 Prepare a new segmented income statement based on the break-even dollar sales that you computed in requirements 2 and 3. What is Crossre's net operating income (loss) in your new segmented income statement? Sales Variable expenses Contribution margin Product line segment margin Common xed expenses not traceable to products Net operating loss Complete this question by entering your answers in the tabs below. Req 1 to 3 Req 4 Req 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? OYes ONo
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