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-

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Shannon Company segments Its Income statement into Its North and South Divisions. The company's overall sales, contribution margin
ratio, and net operating income are $490,000, 38%, and $9,800, respectively. The North Division's contribution margin and
contribution margin ratio are $100,800 and 42%, respectively. The South Division's segment margin is $35,000. The company has
$68,600 of common fixed expenses that cannot be traced to either division.
Required:
Prepare an income statement for Shannon Company that uses the contribution format and is segmented by divisions. In addition, for
the company as a whole and for each segment, show each item on the segmented Income statements as a percent of sales. (Round
your percentage answers to 1 decimal place (l.e .1234 should be entered as 12.3).)
Total Company
Amount
%
Amount
North
%
Divisions
Amount
South
%
Transcribed Image Text:Shannon Company segments Its Income statement into Its North and South Divisions. The company's overall sales, contribution margin ratio, and net operating income are $490,000, 38%, and $9,800, respectively. The North Division's contribution margin and contribution margin ratio are $100,800 and 42%, respectively. The South Division's segment margin is $35,000. The company has $68,600 of common fixed expenses that cannot be traced to either division. Required: Prepare an income statement for Shannon Company that uses the contribution format and is segmented by divisions. In addition, for the company as a whole and for each segment, show each item on the segmented Income statements as a percent of sales. (Round your percentage answers to 1 decimal place (l.e .1234 should be entered as 12.3).) Total Company Amount % Amount North % Divisions Amount South %
Crossfire Company segments its business Into two regions-East and West. The company prepared a contribution format segmented
Income statement as shown below:
sales
Variable expenses
Contribution margin
Traceable fixed expenses
Segment margin
Common fixed expenses
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.
Req 1 to 3
Total Company
$ 1,050,000
787,500
262,500
152,000
110,500
70,000
$ 40,500
Req 4
Complete this question by entering your answers in the tabs below.
East
$ 700,000
560,000
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 5
Dollar sales for the whole company
Dollar sales for the East region
Dollar sales for the West region
140,000
61,000
$ 79,000
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
West
$ 350,000
227,500
122,500
91,000
$ 31,500
Show less A
Crossfire Company segments its business Into two regions-East and West. The company prepared a contribution format segmented
Income statement as shown below:
Sales
Variable expenses
Contribution margin
Traceable fixed expenses
Segment margin
Common fixed expenses
Net operating income
Req 1 to 3
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?
Complete this question by entering your answers in the tabs below.
Reg 4
Total Company
$ 1,050,000
787,500
262,500
152,000
110,500
70,000
$ 40,500
Req 5
East
$ 700,000
560,000
140,000
61,000
$ 79,000
Sales
Variable expenses
Contribution margin
Traceable fixed expenses
Product line segment margin
Common fixed expenses not traceable to products
Net operating loss
West
$ 350,000
227,500
122,500
91,000
$ 31,500
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?
Total Company
East
West
Transcribed Image Text:Crossfire Company segments its business Into two regions-East and West. The company prepared a contribution format segmented Income statement as shown below: sales Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses 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. Req 1 to 3 Total Company $ 1,050,000 787,500 262,500 152,000 110,500 70,000 $ 40,500 Req 4 Complete this question by entering your answers in the tabs below. East $ 700,000 560,000 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 5 Dollar sales for the whole company Dollar sales for the East region Dollar sales for the West region 140,000 61,000 $ 79,000 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 West $ 350,000 227,500 122,500 91,000 $ 31,500 Show less A Crossfire Company segments its business Into two regions-East and West. The company prepared a contribution format segmented Income statement as shown below: Sales Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses Net operating income Req 1 to 3 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? Complete this question by entering your answers in the tabs below. Reg 4 Total Company $ 1,050,000 787,500 262,500 152,000 110,500 70,000 $ 40,500 Req 5 East $ 700,000 560,000 140,000 61,000 $ 79,000 Sales Variable expenses Contribution margin Traceable fixed expenses Product line segment margin Common fixed expenses not traceable to products Net operating loss West $ 350,000 227,500 122,500 91,000 $ 31,500 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? Total Company East West
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