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 Sales Region Central $ 801,000 97,000 238,000 107,000 239,000 56,000 58,000 9,500 24,000 13,000 306,500 5,500 East $697,000 17,000 40,000 18,000 18,000 35,000 58,000 $ (29,500) $ 128,600 316,000 238,000 107,000 16,400 14,300 32,000 27,000 31,000 40,000 614,400 186,600 742,300 (45,300) 34,000 18,000 52,000 $ (97,300) 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 Total corporate expenses Net operating income (loss) West $ 312,000 Sales Region Central $ 801,000 97,000 238,000 107,000 239,000 56,000 58,000 9,500 24,000 13,000 306,500 5,500 East $697,000 17,000 40,000 18,000 18,000 35,000 58,000 $ (29,500) $ 128,600 316,000 238,000 107,000 16,400 14,300 32,000 27,000 31,000 40,000 614,400 186,600 742,300 (45,300) 34,000 18,000 52,000 $ (97,300) 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
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)
Variable expenses:
Total variable expenses
Traceable fixed expenses:
Total traceable fixed expenses
Common fixed expenses:
Total common fixed expense
Net operating income (loss)
Total Company
Amount
West
$ 312,000
%
97,000
107,000
56,000
9,500
24,000
13,000
306,500
5,500
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.)
17,000
18,000
35,000
40,000
18,000
58,000
$ (29,500) $ 128,600
Sales Region
Central
East
$801,000 $697,000
West
Amount
238,000
239,000
58,000
16,400
32,000
31,000
614,400
186,600
%
316,000
238,000
107,000
14,300
27,000
40,000
742,300
(45,300)
34,000
18,000
52,000
$ (97,300)
Central
Amount
%
East
Amount
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education