Crossfire Company segments its business into two regions-East and West. The company prepared a contribution...
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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 $1,140,000 855,000 285,000 144,000 141,000 72,000 $ 69,000 East $ 760,000 577,600 182,400 63,000 $ 119,400 West $ 380,000 277,400 102,600 81,000 $ 21,600 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 Crossfires 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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