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In: Accounting
Exercise 6-10 Companywide and Segment Break-Even Analysis [LO6-5] Crossfire Company segments its business into two regions—East...
Exercise 6-10 Companywide and Segment Break-Even Analysis [LO6-5]
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 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. Use the same format as shown above. 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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ekkarill92 answered 1 year agoRelated Solutions
Exercise 5-5 Companywide and Segment Break-Even Analysis [LO5-5] Piedmont Company segments its business into two regions—North...
Exercise 5-5 Companywide and Segment Break-Even Analysis
[LO5-5]
Piedmont Company segments its business into two regions—North
and South. The company prepared the contribution format segmented
income statement shown below:
Total
Company
North
South
Sales
$
825,000
$
550,000
$
275,000
Variable expenses
495,000
385,000
110,000
Contribution margin
330,000
165,000
165,000
Traceable fixed expenses
144,000
72,000
72,000
Segment margin
186,000
$
93,000
$
93,000
Common fixed expenses
64,000
Net operating income
$
122,000
Required:
1. Compute the companywide break-even point in...
Companywide and Segment Break-Even Analysis; Decision Making Toxaway Company is a merchandiser that segments its business...
Companywide and Segment Break-Even Analysis; Decision Making
Toxaway Company is a merchandiser that segments its business
into two divisions—Commercial and Residential. The company’s
accounting intern was asked to prepare segmented income statements
that the company’s divisional managers could use to calculate their
break-even points and make decisions. She took the prior month’s
companywide income statement and prepared the absorption format
segmented income statement shown below:
Total
Company
Commercial
Residential
Sales
$
750,000
$
250,000
$
500,000
Cost of goods sold...
Problem 6-24A Companywide and Segment Break-Even Analysis; Decision Making [LO6-4, LO6-5] Toxaway Company is a merchandiser...
Problem 6-24A Companywide and Segment Break-Even Analysis;
Decision Making [LO6-4, LO6-5]
Toxaway Company is a merchandiser that segments its business
into two divisions—Commercial and Residential. The company’s
accounting intern was asked to prepare segmented income statements
that the company’s divisional managers could use to calculate their
break-even points and make decisions. She took the prior month’s
companywide income statement and prepared the absorption format
segmented income statement shown below:
Total
Company
Commercial
Residential
Sales
$
1,005,000
$
335,000
$
670,000...
Problem 6-24 Companywide and Segment Break-Even Analysis; Decision Making [LO6-4, LO6-5] Toxaway Company is a merchandiser...
Problem 6-24 Companywide and Segment Break-Even Analysis;
Decision Making [LO6-4, LO6-5] Toxaway Company is a merchandiser
that segments its business into two divisions—Commercial and
Residential. The company’s accounting intern was asked to prepare
segmented income statements that the company’s divisional managers
could use to calculate their break-even points and make decisions.
She took the prior month’s companywide income statement and
prepared the absorption format segmented income statement shown
below:
Total Company Commercial Residential Sales $ 840,000 $ 280,000 $
560,000...
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
$
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...
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...
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