Stationfire 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	$	1,125,000		$	750,000		$	375,000
Variable expenses		843,750			600,000			243,750
Contribution margin		281,250			150,000			131,250
Traceable fixed expenses		160,000			62,000			98,000
Segment margin		121,250		$	88,000		$	33,250
Common fixed expenses		50,000
Net operating income	$	71,250

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 Station fires net operating income (loss) in your new segmented income statement?

5. Do you think that Stationfire should allocate its common fixed expenses to the East and West regions when computing the break-even points for each region?