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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-

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
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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