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Crossfire Company segments its business into two regionsEast and West. The company prepared a contribution...

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Accounting

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 $ 1,035,000 $ 690,000 $ 345,000
Variable expenses 828,000579,600248,400
Contribution margin 207,000110,40096,600
Traceable fixed expenses 136,00059,00077,000
Segment margin 71,000 $ 51,400 $ 19,600
Common fixed expenses 60,000
Net operating income $ 11,000
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 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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