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 Regional expenses (traceable): Cost of goods sold Advertising Salaries Utilities Depreciation Shipping expense Total regional expenses Regional income (toss) before corporate expenses Corporate expenses Advertising (general) General adsinistrative expense West $311,000 92,000 110,000 59,000 8,900 25,000 15,000 309,900 1,100 14,000 20,000 34,000 $ (32,500) Sales Region Central 5 800,000 245,000 245,000 59,000 15,500 33,000 28,000 625,500 41.000 20,000 61,000 East 1.698,000 313,000 237,000 112,000 13,900 26,000 43,000 744,900 30,000 20,000 38,000 $113,300 $ 104,900) Total corporate expenses Net operating income (Loss) 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.)

McNulty, Inc., produces desks and chairs. A new CFO has just been hired and announces a new policy that if a product cannot earn a margin of at least 35 percent, it will be dropped. The margin is computed as product gross profit divided by reported product cost.   Manufacturing overhead for year 1 totaled $1,071,000. Overhead is allocated to products based on direct labor cost. Data for year 1 show the following.     Chairs Desks Sales revenue $1,580,800 $2,786,000 Direct materials 595,000 910,000 Direct labor 230,000 400,000   Required: a-1. Based on the CFO's new policy, calculate the profit margin for both chairs and desks.  a-2. Which of the two products should be dropped? b. Regardless of your answer in requirement (a), the CFO decides at the beginning of year 2 to drop the chair product. The company cost analyst estimates that overhead without the chair line will be $760,000. The revenue and costs for desks are expected to be the same as last year. What is the…

Keggler's Supply is a merchandiser of three different products. The company's February 28 inventories are footwear, 19,000 units, sports equipment, 81,500 units; and apparel, 49,000 units. Management belleves each of these inventories is too high. As a result, a new policy dictates that ending inventory in any month should equal 29% of the expected unit sales for the following month. Expected sales in units for March, April, May, and June follow. Footwear Sports equipment Apparel Required: 1. Prepare a merchandise purchases budget (in units) for each product for each of the months of March, April, and May. Budgeted Sales in Units March April May 15,000 24,500 31,000 71,500 88,000 95,000 40,500 37,500 33,000 24,000 FOOTWEAR Budgeted sales for next month Ratio of ending inventory to future sales Required units of available merchandise Budgeted purchases SPORTS EQUIPMENT Budgeted sales for next month Ratio of ending inventory to future sales Budgeted purchases APPAREL Merchandise…

Montrose Instrumentation produces measurement equipment. One component, used in a variety of the company's products, is critical and the supply chain often breaks. For that reason, Montrose has a policy to hold in inventory enough of the component to produce three month's worth of sales (one component is used in each unit of product in which it is used). On February 1, the company has 40,000 components in stock. Sales of the units in which the component is used in each of the next six months are estimated to be as follows: February March April May June July 34,750 28,750 30,250 35,800 32,400 44,360 Parts are purchased at a wholesale price of $55. The vendor has a financing arrangement by which Montrose pays 40 percent of the purchase price in the month when the components are delivered and 60 percent in the following month. Montrose purchased 42,500 parts in January. Required: a. Estimate purchases of the component (in units) for February and March. b. Estimate the cash disbursements…