Problem 6-21 (Algo) Segment Reporting and Decision Making [LO6-4] Vulcan Company's contribution format income statement for...

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Problem 6-21 (Algo) Segment Reporting and Decision Making [LO6-4] Vulcan Company's contribution format income statement for June is as follows: Vulcan Company Income Statement For the Month Ended June 30 Sales Variable expenses Contribution margin Fixed expenses $ 800,000 300,000 500,000 460,000 $ 40,000 Net operating income Management wants to improve profits and gathered the following data: a. The company is divided into two sales territories-Northern and Southern. The Northern Territory recorded $400,000 in sales and $208,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $172,000 and $88,000 are traceable to the Northern and Southern Territories, respectively. The rest of the fixed expenses are common to the two territories. b. The company is the exclusive distributor for two products-Paks and Tibs. Sales of Paks and Tibs totaled $125,000 and $275,000, respectively, in the Northern territory during June. Variable expenses are 30% of the selling price for Paks and 62% for Tibs. Cost records show $75,000 of the Northern Territory's fixed expenses are traceable to Paks and $60,500 to Tibs, with the remainder common to the two products. Required: 1-a. Prepare contribution format income statements for the total company segmented by sales territories. 1-b. Prepare contribution format income statements for the Northern Territory segmented by product line. Problem 6-21 (Algo) Segment Reporting and Decision Making [LO6-4] Vulcan Company's contribution format income statement for June is as follows: Vulcan Company Income Statement For the Month Ended June 30 Sales Variable expenses Contribution margin Fixed expenses $ 800,000 300,000 500,000 460,000 $ 40,000 Net operating income Management wants to improve profits and gathered the following data: a. The company is divided into two sales territories-Northern and Southern. The Northern Territory recorded $400,000 in sales and $208,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $172,000 and $88,000 are traceable to the Northern and Southern Territories, respectively. The rest of the fixed expenses are common to the two territories. b. The company is the exclusive distributor for two products-Paks and Tibs. Sales of Paks and Tibs totaled $125,000 and $275,000, respectively, in the Northern territory during June. Variable expenses are 30% of the selling price for Paks and 62% for Tibs. Cost records show $75,000 of the Northern Territory's fixed expenses are traceable to Paks and $60,500 to Tibs, with the remainder common to the two products. Required: 1-a. Prepare contribution format income statements for the total company segmented by sales territories. 1-b. Prepare contribution format income statements for the Northern Territory segmented by product line.