Exercise 7-10 Companywide and Segment Break-Even Analysis (L07-5) 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 sargin Traceable fixed expenses. Segment margin Common fixed expenses Net operating income Total Company 51,125,000 1143,250 281,250 160,000 121,250 SO,000 $ 71,250 East $ 750,000 600,000 150,00 62, BD $ 58,000 west $375,00 24,250 131,250 98,000 $ 33,250 es 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 foss) 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- 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 Reg4 Reqs 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 your intermediate calculations to 2 decimal places.) Show less Break Even Point Dollar sales for the whole company Dollar sales for the East region Complete this question by entering your answers in the tabs below. Req 1 to 3 Reg 4 Reqs 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 your intermediate calculations to 2 decimal places.) Show less Break Even Point Dollar sales for the whole company Dollar sales for the East region Dollar sales for the West region Req 4 > Complete this question by entering your answers in the tabs below. Req 1 to 3 Req 4 Reg 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 (los) in your new segmented income statement? (Round your intermediate calculations to 2 decimal places.) Total Company East West Complete this question by entering your answers in the tabs below. Reg 1 to 3 Reg 4 Reqs 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
