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Required: 3. Prepare a new contribution format segmented income statement for May. (Round percentage answers to 1 decimal place.)

Required: 3. Prepare a new contribution format segmented income statement for May. (Round percentage answers to 1 decimal place.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 West $ 313,000 97,000 Sales Region Central $ 801,000 East $ 705,000 242,000 315,000 102,000 237,000 241,000 52,000 57,000 109,000 Utilities 9,300 16,500 14,000 Depreciation 21,000 32,000 27,000 Shipping expense 13,000 33,000 42,000 Total regional expenses 294,300 617,500 748,000 Regional income (loss) before corporate expenses 18,700 183,500 (43,000) Corporate expenses: Advertising (general) 16,000 43,000 33,000 General administrative expense 20,000 20,000 20,000 Total corporate expenses 36,000 63,000 53,000 Net operating income (loss) $ (17,300) $ 120,500 $ (96,000) 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.) 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 Central East % Amount % Amount % Amount %
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 West $ 313,000 97,000 Sales Region Central $ 801,000 East $ 705,000 242,000 315,000 102,000 237,000 241,000 52,000 57,000 109,000 Utilities 9,300 16,500 14,000 Depreciation 21,000 32,000 27,000 Shipping expense 13,000 33,000 42,000 Total regional expenses 294,300 617,500 748,000 Regional income (loss) before corporate expenses 18,700 183,500 (43,000) Corporate expenses: Advertising (general) 16,000 43,000 33,000 General administrative expense 20,000 20,000 20,000 Total corporate expenses 36,000 63,000 53,000 Net operating income (loss) $ (17,300) $ 120,500 $ (96,000) 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.) 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 Central East % Amount % Amount % Amount %
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