Problem 7-26 Restructuring a Segmented Income Statement (L07-4) 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 company's first effort at preparing a segmented income statement for May is given below. West $ 314,000 Sales Region Central East $ 801,000 $ 704,000 Sales Regional expenses (traceable) Cost of goods sold Advertising Salaries Utilities Depreciation Shipping expense Total regional expenses Regional income (loss) before corporate expenses Corporate expenses Advertising (general) General administrative expense Total corporate expenses Net operating income (los) 99,000 109,000 56,000 9,000 23,000 13,000 309,000 5,000 243,000 236,000 54,000 15,800 30,000 26.000 604,800 196,200 320,000 242,000 113,000 13,700 29,000 44,000 761,700 (57,700) 15,000 20,000 35,000 $ (30,000) 38,000 33,000 20,000 20,000 58,000 53,000 $ 138,200 (110,700) The cost of goods sold and shipping expense are both variable. All other costs are fixed. West Central East Total Company Amount % Amount % Amount % Amount Variable expenses: Total variable expenses 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Traceable fixed expenses: Total traceable fixed expenses 0 0 0 0 0.0 0.0 0.0 $ 0.0 0.0 $ 0.0 0.0 $ 0 0 0 0 0.0 Common foxed expenses: 0 0.0 Total common fixed expense Net operating income (loss) $ 0 0.0