Crossfire Company segments its business into two regions-East and West. The company prepared a contribution format...
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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 $ 930,000 744,000 186,000 116,000 East Sales Variable expenses Contribution margin Traceable fixed expenses $ 620,000 514,600 105,400 51,000 $ 54,400 West $ 310,000 229,400 80,600 65,000 $ 15,600 Segment margin Common fixed expenses 70,000 62,000 $ 8,000 Net operating income 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? 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) 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 > 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 $ 930,000 744,000 186,000 116,000 East Sales Variable expenses Contribution margin Traceable fixed expenses $ 620,000 514,600 105,400 51,000 $ 54,400 West $ 310,000 229,400 80,600 65,000 $ 15,600 Segment margin Common fixed expenses 70,000 62,000 $ 8,000 Net operating income 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? 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) 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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Break even point in Dollar Sales Fixed Expense Contribution Margin ratio Company Wide Break even Poi... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0077522940
15th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
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