PROBLEM 13-30 Restructuring a Segmented Income Statement [LO1] Losses have been incurred at Millard Corporation for some time. In an effort to isolate the problem od improve the company's performance, management has requested that the monthly income atement be segmented by sales region. The company's first effort at preparing a segmented state- ment is given below. This statement is for May, the most recent month of activity. Sales Region West Central East Sales $450,000 S800,000 $ 750,000 Regional expenses (traceable): Cost of goods sold. Advertising Salaries Utilities.. Depreciation. Shipping expense. 376,500 210,000 135,000 15,000 30,000 28,500 162,900 280,000 108,000 200,000 90,000 88,000 13,500 12,000 27,000 28,000 17,100 32,000 Total regional expenses. 418,500 640,000 795,000 Regional income (loss) before corporate expenses 31,500 160,000 (45,000) Corporate expenses: Advertising (general) General administrative expense. 32,000 30,000 50,000 18,000 50,000 50,000 Total corporate expenses... 68.000 82,000 80,000 Net operating income (loss). $ (36.500) $ 78,000 $ (125,000) Cost of goods sold and shipping expense are both variable; other costs are all fixed. Millard Corporation is a wholesale distributor of office products. It purchases office products Dm manufacturers and distributes them in the three regions given above. The three regions are out the same size, and each has its own manager and sales staff. The products that the company stributes vary widely in profitability. Qured Prepare a new contribution format segmented income statement for May. Show a Total column as well as data for cach region. In addition, for the company as a whole and for cach sales region, show each item on the segmented income statement as a percent of sales. Analyze the statement that you prepared in part (3) above. What points that mght help to mprove the company's performance would you bring to management's attention?
PROBLEM 13-30 Restructuring a Segmented Income Statement [LO1] Losses have been incurred at Millard Corporation for some time. In an effort to isolate the problem od improve the company's performance, management has requested that the monthly income atement be segmented by sales region. The company's first effort at preparing a segmented state- ment is given below. This statement is for May, the most recent month of activity. Sales Region West Central East Sales $450,000 S800,000 $ 750,000 Regional expenses (traceable): Cost of goods sold. Advertising Salaries Utilities.. Depreciation. Shipping expense. 376,500 210,000 135,000 15,000 30,000 28,500 162,900 280,000 108,000 200,000 90,000 88,000 13,500 12,000 27,000 28,000 17,100 32,000 Total regional expenses. 418,500 640,000 795,000 Regional income (loss) before corporate expenses 31,500 160,000 (45,000) Corporate expenses: Advertising (general) General administrative expense. 32,000 30,000 50,000 18,000 50,000 50,000 Total corporate expenses... 68.000 82,000 80,000 Net operating income (loss). $ (36.500) $ 78,000 $ (125,000) Cost of goods sold and shipping expense are both variable; other costs are all fixed. Millard Corporation is a wholesale distributor of office products. It purchases office products Dm manufacturers and distributes them in the three regions given above. The three regions are out the same size, and each has its own manager and sales staff. The products that the company stributes vary widely in profitability. Qured Prepare a new contribution format segmented income statement for May. Show a Total column as well as data for cach region. In addition, for the company as a whole and for cach sales region, show each item on the segmented income statement as a percent of sales. Analyze the statement that you prepared in part (3) above. What points that mght help to mprove the company's performance would you bring to management's attention?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![statement be segmented by sales region. The company's first effort at preparing a segmented state-
ment is given below. This statement is for May, the most recent month of activity.
CORL EM 13-30 Restructuring a Segmented Income Statement [LO1]
PAes have been incurred at Millard Corporation for some time In an effort to isolate the problem
d improve the company's performance, management has requested that the monthly income
Sales Region
West
Central
East
Sales
$450,000
S800,000
$ 750,000
Regional expenses (traceable):
Cost of goods sold .
Advertising . .
Salaries
Utilities
Depreciation.
Shipping expense.
162,900
108,000
280,000
376,500
210,000
135,000
200,000
90,000
88,000
13,500
12,000
15,000
30,000
28,500
27,000
28,000
17,100
32,000
Total regional expenses
418,500
640,000
795,000
Regional income (loss) before
corporate expenses
31,500
160,000
(45,000)
Corporate expenses:
Advertising (general)
General administrative expense.
30,000
50,000
18,000
32,000
50,000
50,000
Total corporate expenses.
68.000
82,000
80,000
Net operating income (loss).
$ (36,500) $ 78,000
$ (125,000)
Cost of goods sold and shipping expense are both variable; other costs are all fixed.
Millard Corporation is a wholesale distributor of office products. It purchases office products
from manufacturers and distributes them in the three regions given above. The three regions are
about the same size, and each has its own manager and sales staff. The products that the company
distributes vary widely in profitability.
feauredt
Pfepare a new contribution format segmented income statement for May. Show a Total
column as well as data for cach region. In addition, for the company as a whole and for
cach sales region, show each item on the secgmented income statement as a percent of
sales.
4.
3.
Analyze the statement that you prepared in part (3) above. What points that might help to
Improve the company's performance would you bring to management's attention?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5f64b4a0-dbd7-46cb-af8b-72074494e5f9%2Ff4649608-9656-41c8-a1e8-6b2001d351e2%2Fgmoe411_processed.jpeg&w=3840&q=75)
Transcribed Image Text:statement be segmented by sales region. The company's first effort at preparing a segmented state-
ment is given below. This statement is for May, the most recent month of activity.
CORL EM 13-30 Restructuring a Segmented Income Statement [LO1]
PAes have been incurred at Millard Corporation for some time In an effort to isolate the problem
d improve the company's performance, management has requested that the monthly income
Sales Region
West
Central
East
Sales
$450,000
S800,000
$ 750,000
Regional expenses (traceable):
Cost of goods sold .
Advertising . .
Salaries
Utilities
Depreciation.
Shipping expense.
162,900
108,000
280,000
376,500
210,000
135,000
200,000
90,000
88,000
13,500
12,000
15,000
30,000
28,500
27,000
28,000
17,100
32,000
Total regional expenses
418,500
640,000
795,000
Regional income (loss) before
corporate expenses
31,500
160,000
(45,000)
Corporate expenses:
Advertising (general)
General administrative expense.
30,000
50,000
18,000
32,000
50,000
50,000
Total corporate expenses.
68.000
82,000
80,000
Net operating income (loss).
$ (36,500) $ 78,000
$ (125,000)
Cost of goods sold and shipping expense are both variable; other costs are all fixed.
Millard Corporation is a wholesale distributor of office products. It purchases office products
from manufacturers and distributes them in the three regions given above. The three regions are
about the same size, and each has its own manager and sales staff. The products that the company
distributes vary widely in profitability.
feauredt
Pfepare a new contribution format segmented income statement for May. Show a Total
column as well as data for cach region. In addition, for the company as a whole and for
cach sales region, show each item on the secgmented income statement as a percent of
sales.
4.
3.
Analyze the statement that you prepared in part (3) above. What points that might help to
Improve the company's performance would you bring to management's attention?
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 2 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