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Business, 30.10.2021 14:00 Gigglygoose3159

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 $ 990,000 $ 660,000 $ 330,000 Variable expenses 742,500 528,000 214,500 Contribution margin 247,500 132,000 115,500 Traceable fixed expenses 147,000 56,000 91,000 Segment margin 100,500 $ 76,000 $ 24,500 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?

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Crossfire Company segments its business into two regions—East and West. The company prepared a contr...
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