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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 $ $1, 120, 000$ $ $770, 000$ $ $350, 000$

Variable expenses $840, 000 616, 000 224, 000$

Contribution margin $280, 000 154, 000 126, 000$

Traceable fixed expenses $155, 000 65, 000 90, 000$

Segment margin $125, 000$ $ $89, 000$ $ $36, 000$

Common fixed expenses $70, 000$

Net operating income $ $55, 000$

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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