Millard Corporation is a wholesale distributor of office products. It purchases office products from

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.

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.)

4. Provide the percentage for West, Central, East, and the overall Total Sales Region West Percentage Central Percentage East Percentage Sales $ 311,000 $ 803,000 $ 696,000 Regional expenses (traceable): Cost of goods sold 94,000 244,000 315,000 Advertising 107,000 235,000 239,000 Salaries 58,000 57,000 115,000 Utilities 9,300 15,900 14,000 Depreciation 22,000 28,000 29,000 Shipping expense 13,000 26,000 44,000 Total regional expenses 303,300 605,900 756,000 Regional income (loss) before corporate expenses 7,700 197,100 (60,000 ) Corporate expenses: Advertising (general) 13,000 38,000 38,000 General administrative expense 19,000 19,000 19,000 Total corporate expenses 32,000 57,000 57,000 Net operating income (loss) $ (24,300 ) $ 140,100 $ (117,000)