Millard Corporation is a wholesale distributor of office products. It purchases office products from manufacturers and distributes them in the West, Central, and East regions. Each of these regions is about the same size and each has its own manager and sales staff. The company has been experiencing losses for many months. In an effort to improve performance, management has requested that the monthly income statement be segmented by sales region. The company’s first effort at preparing a segmented income statement for May is given below. Sales Region West Central East Sales $ 311,000 $ 796,000 $ 703,000 Regional expenses (traceable): Cost of goods sold 94,000 240,000 312,000 Advertising 105,000 236,000 240,000 Salaries 54,000 54,000 107,000 Utilities 8,700 16,100 13,600 Depreciation 21,000 35,000 28,000 Shipping expense 17,000 31,000 36,000 Total regional expenses 299,700 612,100 736,600 Regional income (loss) before corporate expenses 11,300 183,900 (33,600) Corporate expenses: Advertising (general) 17,000 39,000 34,000 General administrative expense 20,000 20,000 20,000 Total corporate expenses 37,000 59,000 54,000 Net operating income (loss) $ (25,700) $ 124,900 $ (87,600) The cost of goods sold and shipping expense are both variable. All other costs are fixed. Required: 3. Prepare a new contribution format segmented income statement for May. (Round percentage answers to 1 decimal place.)
Millard Corporation is a wholesale distributor of office products. It purchases office products from manufacturers and distributes them in the West, Central, and East regions. Each of these regions is about the same size and each has its own manager and sales staff.
The company has been experiencing losses for many months. In an effort to improve performance, management has requested that the monthly income statement be segmented by sales region. The company’s first effort at preparing a segmented income statement for May is given below.
Sales Region | |||
---|---|---|---|
West | Central | East | |
Sales | $ 311,000 | $ 796,000 | $ 703,000 |
Regional expenses (traceable): | |||
Cost of goods sold | 94,000 | 240,000 | 312,000 |
Advertising | 105,000 | 236,000 | 240,000 |
Salaries | 54,000 | 54,000 | 107,000 |
Utilities | 8,700 | 16,100 | 13,600 |
21,000 | 35,000 | 28,000 | |
Shipping expense | 17,000 | 31,000 | 36,000 |
Total regional expenses | 299,700 | 612,100 | 736,600 |
Regional income (loss) before corporate expenses | 11,300 | 183,900 | (33,600) |
Corporate expenses: | |||
Advertising (general) | 17,000 | 39,000 | 34,000 |
General administrative expense | 20,000 | 20,000 | 20,000 |
Total corporate expenses | 37,000 | 59,000 | 54,000 |
Net operating income (loss) | $ (25,700) | $ 124,900 | $ (87,600) |
The cost of goods sold and shipping expense are both variable. All other costs are fixed.
Required:
3. Prepare a new contribution format segmented income statement for May. (Round percentage answers to 1 decimal place.)
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