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Total Company East West Sales $975,000 $650,000 $325,000 Variable expenses 682,500 487,500 195,000 Contribution margin 292,500 162,500 Traceable fixed expenses 156,000 68,000 130,000 88,000

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Total Company East West Sales $975,000 $650,000 $325,000 Variable expenses 682,500 487,500 195,000 Contribution margin 292,500 162,500 Traceable fixed expenses 156,000 68,000 130,000 88,000 Segment margin 136,500 $ 94,500 $ 42,000 Common fixed expenses 60,000 Net operating Income $ 76,500 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. 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. Req 1 to 3 Req 41 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 (loss) in your new segmented Income statement? Total Company East West $ 0 0 0 0 0 Pen 1 to 3 Den 5

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