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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: Total Company $ 990,000 742,500 247,500 147,000 East West Sales Variable expenses Contribution margin Traceable fixed expenses $ 660,000 528,000 132,000 56,000 $ 76,000 $ 330,000 214,500 115,500 91,000 $ 24,500 Segment margin 100,500 Common fixed expenses 65,000 Net operating income $ 35,500 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. 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 4 Req 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? OYes ONO

Crossfire Company segments its business into two regions-East and West. The company prepared a contribution format segmented income statement as shown below: Total Company $ 990,000 742,500 247,500 147,000 East West Sales Variable expenses Contribution margin Traceable fixed expenses $ 660,000 528,000 132,000 56,000 $ 76,000 $ 330,000 214,500 115,500 91,000 $ 24,500 Segment margin 100,500 Common fixed expenses 65,000 Net operating income $ 35,500 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. 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 4 Req 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? OYes ONO

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 Total Company $ 990,000 742,500 247,500 147,000 East $ 660,000 528,000 132,000 56,000 $ 76,000 West $ 330,000 214,500 115.500 91,000 $ 24,500 Segment margin 100,500 65,000 $ 35,500 0:23:30 Common fixed expenses Net operating income ped 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 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? pok Complete this question by entering your answers in the tabs below. Reg 1 to 3 Req 4 Req 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? OYes ONo
Transcribed Image Text: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 Total Company $ 990,000 742,500 247,500 147,000 East $ 660,000 528,000 132,000 56,000 $ 76,000 West $ 330,000 214,500 115.500 91,000 $ 24,500 Segment margin 100,500 65,000 $ 35,500 0:23:30 Common fixed expenses Net operating income ped 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 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? pok Complete this question by entering your answers in the tabs below. Reg 1 to 3 Req 4 Req 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? OYes ONo
Req 1 to 3 Req 4 Req 5 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. (Round intermediate calculations to 2 decimal places) She Break-Even point Dollar sales for the whole company Dollar sales for the East region Dollar sales for the West region Req 1 to 3 Req 4
Transcribed Image Text:Req 1 to 3 Req 4 Req 5 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. (Round intermediate calculations to 2 decimal places) She Break-Even point Dollar sales for the whole company Dollar sales for the East region Dollar sales for the West region Req 1 to 3 Req 4
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