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 (loss) before corporate expenses Corporate expenses: Advertising (general) General administrative expense West $ 312,000 94,000 100,000 56,000 8,600 25,000 16,000 299,600 12,400 13,000 20,000 33,000 $ (20,600) Sales Region Central $ 796,000 237,000 235,000 53,000 16,300 28,000 25,000 594,300 201,700 East $ 701,000 316,000 238,000 107,000 14, 200 30,000 40,000 745,200 (44,200) 39,000 20,000 59,000 $ 142,700 $ (102,200) 38,000 20,000 58,000 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.)
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 (loss) before corporate expenses Corporate expenses: Advertising (general) General administrative expense West $ 312,000 94,000 100,000 56,000 8,600 25,000 16,000 299,600 12,400 13,000 20,000 33,000 $ (20,600) Sales Region Central $ 796,000 237,000 235,000 53,000 16,300 28,000 25,000 594,300 201,700 East $ 701,000 316,000 238,000 107,000 14, 200 30,000 40,000 745,200 (44,200) 39,000 20,000 59,000 $ 142,700 $ (102,200) 38,000 20,000 58,000 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.)
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Author:Don R. Hansen, Maryanne M. Mowen
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Transcribed Image Text: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 (loss) before corporate expenses
Corporate expenses:
Advertising (general)
General administrative expense
Total corporate expenses
Net operating income (loss)
West
$ 312,000
94,000
100,000
56,000
8,600
25,000
16,000
299,600
12,400
13,000
20,000
33,000
$ (20,600)
Sales Region
Central
$ 796,000
237,000
235,000
53,000
16,300
28,000
25,000
594,300
201,700
East
$ 701,000
316,000
238,000
107,000
14, 200
30,000
40,000
745,200
(44,200)
39,000
20,000
59,000
$ 142,700 $ (102,200)
38,000
20,000
58,000
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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