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Sales 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
Sales 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 $ 930,000 744,000 186,000 East $ 620,000 514,600 West $ 310,000 229,400 105,400 51,000 80,600 65,000 $ 15,600 116,000 70,000 $ 54,400 62,000 $ 8,000 Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses Net operating income 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
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