Vulcan Company's contribution format income statement for June is given below: Vulcan Company Income Statement For the Month Ended June 30 900.000 Sales 408,000 Variable expenses 492.000 Contribution margin Fixed expenses 480,000 Net operating income 12.000 Management is disappointed with the companys performance and is wondering what can be done to improve profits. By examining sales and cost records, you have determined the following: 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 Southem Territory Fixed expenses of $180,000 and $145,000 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 produc s Paks and Tibs. Sales of Paks and Tibs totaled $160,000 and $240,000, respectively, in the Northern territory during June. Variable expenses are 28% of the selling price for Paks and 68% for Tibs. Cost records show that $78,400 of the Northern Territory's fixed expenses are traceable to Paks and $55,200 to Tibs, with the remainder common to the two products