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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Crossfire Company segments its business into two regionsAc€??East and West. The company prepared the contribution format segmented income statement 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. (Round intermediate calculations to two decimal places) |
| 2. |
Compute the break-even point in dollar sales for the East region.(Round intermediate calculations to two decimal places) |
| 3. |
Compute the break-even point in dollar sales for the West region.(Round intermediate calculations to two decimal places) |
| 4. | Prepare a new segmented income statement based on the break-even dollar sales that you computed in requirements 2 and 3. |
| 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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