Exercise 6-10 Companywide and Segment Break-Even Analysis (L06-5) 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 $1,020,080 765,000 255, eee 156, eee 99,000 65, een $ 34, eee East $ 680,000 544,000 136, eee 58,000 $ 78,000 West $ 340,000 221,699 119,000 98,000 $ 21, eee 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 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. Reg 1 to 3 Reg 4 Reg 5 Prepare a new segmented income statement based on the break-even dollar sales that you computed in requirements 2 and each region? ses to the East and West regic Complete this question by entering your answers in the tabs below. Req 1 to 3 Req 4 Reg 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) Break-Even point Dollar sales for the whole company Dollar sales for the East region Dollar sales for the West region K Req 1 to Req 4 > Prev 3 of 21 Next statement? enses to the East and West regions when computing the Complete this question by entering your answers in the tabs below. Req 1 to 3 keq 4 Req 5 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 Crossfire's net operating income (loss) in your new segmented income statement? Total Company East West in requirements Operating income (loss) in your new segmented income statemer that Crossfire should allocate its common fixed expenses to the East and West regions when computing the even points for each region? Complete this question by entering your answers in the tabs below. Req 1 to 3 Reg 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? Yes O No
