please complete exercise 7-21

2. PROBLEM 7-21 Segment Reporting and Decision-Making LO 74 Valkan Company's contribution format income statement for June is as follows: Management is disappointed with the company's performance and is wondering what can be daes improve profits. By examining ales and cost records, you have determined the following: 2. The company is divided into two sales territories-Northern and Southern. The Northern taram recorded $300.000 in sles and $156,000 in variable expenses during June; the reauining ab and variable expenses were recorded in the Southern territory. Fixed expenses of 5120.00 at 3108,000 are traceable to the Northern and Southern territories, respectively. The red of the fixt expenses are common to the two territories. b. The company is the exelusive distributor for two products-Paks and Tibs. Sales of Pak at Tibs totaled $50.000 and $250,000, respectively, in the Northern territory during Juse. Vaite expenves are 22\% of the selling price for Paks and 58% for Tibs. Cost records show that 5em of the Northern territory's fixed expenses are traceable to Paks and $40.000 to Thbs nith tr remainder common to the fwo products. Required: 1. Prepure contribotion format segenented income statements first showing the sotal compury baly dow between sales lerritories and then showing the Northern territory broken down by prodat is In addition, for the company as a whole and for each segment, show each item on the sagrood income itarencents as a petcent of sales. 2. Look as the statement you have prepured showing the total company segmented by sules totive What invightr revealed by this statement should be mentioned to managemeat? 3. Look at the stacencat you have prepared showing the Northern territory segme PRoetem 7-22. Variable Costinn tnconie Statementsi income Reconciliation 1071 ? Denton Company mamulactures ang income Statements; Income Reconciliation L07-1, 1072,LO23 Variable costs per unit