Question
In: Accounting
Crossfire Company segments its business into two regions—East and West. The company prepared a contribution format...
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 | $ | 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 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?
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Crossfire Company segments its business into two regions—East and West. The company prepared a contribution format...
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:
1. Compute the companywide break-even point in dollar sales.
2. Compute the break-even point...
Crossfire Company segments its business into two regions—East and West. The company prepared a contribution format...
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
$
975,000
$
650,000
$
325,000
Variable expenses
731,250
520,000
211,250
Contribution margin
243,750
130,000
113,750
Traceable fixed expenses
139,000
55,000
84,000
Segment margin
104,750
$
75,000
$
29,750
Common fixed expenses
73,000
Net operating income
$
31,750
Required:
1. Compute the companywide break-even point in dollar sales.
2. Compute the break-even point...
Crossfire Company segments its business into two regions—East and West. The company prepared a contribution format...
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
$
750,000
$
500,000
$
250,000
Variable expenses
525,000
375,000
150,000
Contribution margin
225,000
125,000
100,000
Traceable fixed expenses
140,000
60,000
80,000
Segment margin
85,000
$
65,000
$
20,000
Common fixed expenses
70,000
Net operating income
$
15,000
Required:
1. Compute the companywide break-even point in dollar sales.
2. Compute the break-even point...
Crossfire Company segments its business into two regions—East and West. The company prepared the contribution format...
Crossfire Company segments its business into two regions—East
and West. The company prepared the contribution format segmented
income statement shown below:
Total Company
East
West
Sales
$
1,005,000
$
670,000
$
335,000
Variable expenses
804,000
542,700
261,300
Contribution margin
201,000
127,300
73,700
Traceable fixed expenses
112,000
57,000
55,000
Segment margin
89,000
$
70,300
$
18,700
Common fixed expenses
56,000
Net operating income
$
33,000
Required:
1. Compute the companywide break-even point in dollar sales.
(Round intermediate calculations to two decimal...
Crossfire Company segments its business into two regions—East and West. The company prepared a contribution format...
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
$
1,020,000
$
680,000
$
340,000
Variable expenses
765,000
544,000
221,000
Contribution margin
255,000
136,000
119,000
Traceable fixed expenses
156,000
58,000
98,000
Segment margin
99,000
$
78,000
$
21,000
Common fixed expenses
65,000
Net operating income
$
34,000
Required:
1. Compute the companywide break-even point in dollar sales.
2. Compute the break-even point...
Crossfire Company segments its business into two regions—East and West. The company prepared the contribution format...
Crossfire Company segments its business into two regions—East
and West. The company prepared the contribution format segmented
income statement shown below:
Total
Company
East
West
Sales
$
750,000
$
500,000
$
250,000
Variable expenses
525,000
375,000
150,000
Contribution
margin
225,000
125,000
100,000
Traceable fixed
expenses
140,000
60,000
80,000
Segment margin
85,000
$
65,000
$
20,000
Common fixed
expenses
70,000
Net operating
income
$
15,000
1.
Compute the companywide break-even point in dollar sales.
(Round intermediate calculations to two decimal
places.)...
Crossfire Company segments its business into two regions—East and West. The company prepared a contribution format...
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
$
1,040,000
$
650,000
$
390,000
Variable expenses
676,000
442,000
234,000
Contribution margin
364,000
208,000
156,000
Traceable fixed expenses
148,000
64,000
84,000
Segment margin
216,000
$
144,000
$
72,000
Common fixed expenses
76,000
Net operating income
$
140,000
Required:
1. Compute the companywide break-even point in dollar sales.
2. Compute the break-even point...
Crossfire Company segments its business into two regions—East and West. The company prepared a contribution format...
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
$
930,000
$
620,000
$
310,000
Variable expenses
744,000
514,600
229,400
Contribution margin
186,000
105,400
80,600
Traceable fixed expenses
116,000
51,000
65,000
Segment
margin
70,000
$
54,400
$
15,600
Common fixed expenses
62,000
Net operating income
$
8,000
Required:
1. Compute the
companywide break-even point in dollar sales.
2. Compute the
break-even point...
Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format...
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
$
937,500
$
750,000
$
187,500
Variable expenses
637,500
600,000
37,500
Contribution margin
300,000
150,000
150,000
Traceable fixed expenses
142,000
71,000
71,000
Segment margin
158,000
$
79,000
$
79,000
Common fixed expenses
62,000
Net operating income
$
96,000
Required:
1. Compute the companywide break-even point in dollar sales.
2. Compute the break-even point in...
Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format...
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
$
937,500
$
750,000
$
187,500
Variable expenses
637,500
600,000
37,500
Contribution margin
300,000
150,000
150,000
Traceable fixed expenses
152,000
76,000
76,000
Segment margin
148,000
$
74,000
$
74,000
Common fixed expenses
64,000
Net operating income
$
84,000
Required:
1. Compute the companywide break-even point in dollar sales.
2. Compute the break-even point in...
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