Crossfire Company segments its business into two regionsAc€??East and West. The company prepared 1 answer below »

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Crossfire Company segments its business into two regionsAc€??East and West. The company prepared the contribution format segmented income statement 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. (Round intermediate calculations to two decimal places)

      

        2.

Compute the break-even point in dollar sales for the East region. (Round intermediate calculations to two decimal places)

    

           3.

Compute the break-even point in dollar sales for the West region. (Round intermediate calculations to two decimal places)

     

          4. Prepare a new segmented income statement based on the break-even dollar sales that you computed in requirements 2 and 3.

          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? Yes No

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