Problem 6-26 (Algo) Restructuring a Segmented Income Statement [LO6-4]

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 companys first effort at preparing a segmented income statement for May is given below.

	Sales Region
	West				Central			East
Sales	$	312,000			$	800,000		$	705,000
Regional expenses (traceable):
Cost of goods sold		91,000				243,000			317,000
Advertising		100,000				241,000			237,000
Salaries		59,000				58,000			110,000
Utilities		8,600				16,400			13,800
Depreciation		20,000				33,000			26,000
Shipping expense		13,000				26,000			39,000
Total regional expenses		291,600				617,400			742,800
Regional income (loss) before corporate expenses		20,400				182,600			(37,800	)
Corporate expenses:
Advertising (general)		17,000				40,000			35,000
General administrative expense		18,000				18,000			18,000
Total corporate expenses		35,000				58,000			53,000
Net operating income (loss)	$	(14,600	)		$	124,600		$	(90,800	)

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.)