Crossfire 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 $ $ $
Variable expenses
Contribution margin
Traceable fixed expenses
Segment margin $ $
Common fixed expenses
Net operating income $
Required:
Compute the companywide breakeven point in dollar sales.
Compute the breakeven point in dollar sales for the East region.
Compute the breakeven point in dollar sales for the West region.
Prepare a new segmented income statement based on the breakeven dollar sales that you computed in requirements and What is Crossfires net operating income loss in your new segmented income statement?
Do you think that Crossfire should allocate its common fixed expenses to the East and West regions when computing the breakeven points for each region?
