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 East West Sales $ 915,000 $ 610,000 $ 305,000 Variable expenses 732,000 518,500 213,500 Contribution margin 183,000 91,500 91,500 Traceable fixed expenses 111,000 51,000 60,000 Segment margin 72,000 $ 40,500 $ 31,500 Common fixed expenses 60,000 Net operating income $ 12,000 Required: 1. 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? 2. 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?

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 East West Sales $ 915,000 $ 610,000 $ 305,000 Variable expenses 732,000 518,500 213,500 Contribution margin 183,000 91,500 91,500 Traceable fixed expenses 111,000 51,000 60,000 Segment margin 72,000 $ 40,500 $ 31,500 Common fixed expenses 60,000 Net operating income $ 12,000 Required: 1. 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? 2. 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?

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter14: Decentralized Operations

Section: Chapter Questions

Problem 14.9E: Profit center responsibility reporting On-Demand Sports Co. operates two divisions—the Action Sports...

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	Total Company	East	West
Sales	$ 915,000	$ 610,000	$ 305,000
Variable expenses	732,000	518,500	213,500
Contribution margin	183,000	91,500	91,500
Traceable fixed expenses	111,000	51,000	60,000
Segment margin	72,000	$ 40,500	$ 31,500
Common fixed expenses	60,000
Net operating income	$ 12,000

Similar questions

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 East West Sales $ 900,000 $ 600,000 $ 300,000 Variable expenses 675,000 480,000 195,000 Contribution margin 225,000 120,000 105,000 Traceable fixed expenses 141,000 50,000 91,000 Segment margin 84,000 $ 70,000 $ 14,000 Common fixed expenses 59,000 Net operating income $ 25,000 Required: 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 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?
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 East West Sales $ 910,000 $ 650,000 $ 260,000 Variable expenses 637,000 468,000 169,000 Contribution margin 273,000 182,000 91,000 Traceable fixed expenses 133,000 70,000 63,000 Segment margin 140,000 $ 112,000 $ 28,000 Common fixed expenses 56,000 Net operating income $ 84,000 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 Crossfire’s net operating income (loss) in your new segmented income statement? 5. Do you think that…
Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format segmented income statement as shown: Total Company North South Sales $ 825,000 $ 550,000 $ 275,000 Variable expenses 495,000 385,000 110,000 Contribution margin 330,000 165,000 165,000 Traceable fixed expenses 156,000 78,000 78,000 Segment margin 174,000 $ 87,000 $ 87,000 Common fixed expenses 69,000 Net operating income $ 105,000 Required: 1. Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the North region. 3. Compute the break-even point in dollar sales for the South region. (For all requirements, round your intermediate calculations to 2 decimal places. Round your final answers to the nearest dollar.) 1. Dollar sales for company to break-even 2. Dollar sales for North…
Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format segmented income statement as shown: Total Company North South Sales $ 750,000 $ 600,000 $ 150,000 Variable expenses 510,000 480,000 30,000 Contribution margin 240,000 120,000 120,000 Traceable fixed expenses 128,000 64,000 64,000 Segment margin 112,000 $ 56,000 $ 56,000 Common fixed expenses 54,000 Net operating income $ 58,000 Required: 1. Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the North region. 3. Compute the break-even point in dollar sales for the South region. (For all requirements, round your intermediate calculations to 2 decimal places. Round your final answers to the nearest dollar.)
Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format segmented income statement as shown: Total Company North South Sales $ 600,000 $ 400,000 $ 200,000 Variable expenses 360,000 280,000 80,000 Contribution margin 240,000 120,000 120,000 Traceable fixed expenses 120,000 60,000 60,000 Segment margin 120,000 $ 60,000 $ 60,000 Common fixed expenses 50,000 Net operating income $ 70,000 Required: 1. Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the North region. 3. Compute the break-even point in dollar sales for the South region.
Shannon Company segments its income statement into its North and South Divisions. The company’s overall sales, contribution margin ratio, and net operating income are $790,000, 48%, and $15,800, respectively. The North Division’s contribution margin and contribution margin ratio are $150,800 and 52%, respectively. The South Division’s segment margin is $95,000. The company has $150,100 of common fixed expenses that cannot be traced to either division. Prepare an income statement for Shannon Company that uses the contribution format and is segmented by divisions. In addition, for the company as a whole and for each segment, show each item on the segmented income statements as a percent of sales. (Round your percentage answers to 1 decimal place (i.e .1234 should be entered as 12.3).)
Shannon Company segments its income statement into its North and South Divisions. The company’s overall sales, contribution margin ratio, and net operating income are $480,000, 36%, and $9,600, respectively. The North Division’s contribution margin and contribution margin ratio are $92,000 and 40%, respectively. The South Division’s segment margin is $32,500. The company has $62,400 of common fixed expenses that cannot be traced to either division. Required: Prepare an income statement for Shannon Company that uses the contribution format and is segmented by divisions. In addition, for the company as a whole and for each segment, show each item on the segmented income statements as a percent of sales. (Round your percentage answers to 1 decimal place (i.e .1234 should be entered as 12.3).)
V. A company’s contribution format income statement for the previous follows: AmountSales P300,000Variable expenses 120,000Contribution margin 180,000Fixed expenses 108,000Net operating income P72,000 Required:a. Compute the company’s degree of operating leverage. b. Using the computed degree of operating leverage, estimate the effect on net operating income of a 5% increase in sales. c. Prepare an income statement using contribution format to verify your answer in (b)
Chao, Incorporated, a service provider, has two divisions. The firm’s most recent annual contribution format segmented income statement appears below. Total Company Eastern Division Western Division Sales $ 450,000 $ 90,000 $ 360,000 Variable expenses 243,000 27,000 216,000 Contribution margin 207,000 63,000 144,000 Traceable fixed expenses 100,800 46,800 54,000 Division segment margin 106,200 $ 16,200 $ 90,000 Common fixed expenses 72,000 Net operating income $ 34,200 If the company eliminates the Western Division and the Eastern Division sales increase by 10% as a result, how much will the company’s net operating income decrease? multiple choice $83,700 $88,380 $90,000 $137,700 $144,000
Leno Corporation operates in three different industries each of which is appropriately regarded as a reportable segment. Segment B contributed 30% of Leno Corporation's total sales. Sales for Segment B were $350,000 and traceable costs were $200,000. Total common costs for all segments were $500,000. Leno allocates common costs based on the ratio of each segment's sales to total sales. What should be the operating profit (loss) for Segment B? a. $150,000 b. $10,000 c. $-0- d. ($100,000)
Tres Company has three lines of business, each of which was determined to be reportable segment. Sales aggregated P7,500,000 in the current year, of which Segment One contributed 40%. Traceable costs were P1,750,000 for Segment One out of a total of P5,000,000 for the entity as a whole. The entity allocates common costs of P1,500,000 based on the ratio of a segment's income before common costs to the total income before common costs. What amount should be reported as operating profit for Segment One?
B. Considering the following information, please prepare income statements using both traditional and contribution formats Items Amount (Tk.) Sales 7,50,000.00 Direct materials 2,47,000.00 Direct wages 87,000.00 Salary 36,000.00 Factory Rent 40,000.00 Electricity 12,600.00 Depreciation 28,000.00 Insurance 22,000.00 Utilities 27,000.00 Conveyance 24,000.00