Provided below are the marketing segment sales for Caterpillar, Inc., for a recent year.

The Power Systems and Electric Power segments design, manufacture, and market engines. The geographic segments sell Caterpillar equipment to their respective regions.
Assume the following information:

a. Use the sales information and the additional assumed information to prepare a contribution margin by segment report. Round to two decimal places. In addition, calculate the contribution margin ratio for each segment as a whole percent, rounded to one decimal place.
b. Prepare a table showing the manufacturing margin, dealer commissions, and variable promotion expenses as a percent of sales for each segment. Round whole percent's to one decimal place.
c. Use the information in (a) and (b) to interpret the segmentperformance.

Transcribed Image Text:

Caterpillar, Inc Machinery and Engines Marketing Segment Sales (in millions) Europe/Africa/ Middle East (EAME) $7,516 Latin America $3,530 Power Systems $4,966 North Electric Americi Power $9,571 $3.190 Asia Sales $3,396 Europe/Africa/ Asia Middle East Latin Power North Electric Pacific (EAME) America Systems America Power Variable cost of goods sold as a percent of sales percent of sales expenses (in millions) 48% 9% $460 55% 11% $800 50% 8% 350 50% 6% $780 55% 10% $850 55% 5% $400 Dealer commissions as a Variable promotion