6-26 in google sheet or excel doc please
Tered in Year 2 and Year 3 if the company had been using Lean Production, with the result that ending inventory was zero. b. If Lean Production had been used during Year 2 and Year 3, what would the company's net operating income (or loss) have been in each year under absorption costing? No com- putations are necessary . PROBLEM 6-26 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 perfor- mance, 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. Sales Region West Central East Sales ........ Regional expenses (traceable): $450,000 $800,000 $ 750,000 Cost of goods sold 162,900 Advertising ...... 280,000 376,500 108,000 200,000 Salaries . ... . 210,000 90,000 88,000 Utilities 135,000 13,500 Depreciation. . 12,000 15,000 27,000 Shipping expense . 28,000 30,000 17,100 32,000 28,500 Total regional expenses 418,500 640,000 795,000 Regional income (loss) before corporate expenses ... . 31,500 160,000 (45,000) Corporate expenses: Advertising (general). . 18,000 32,000 30,000 General administrative expense. 50,000 50,000 50,000 Total corporate expenses .... 68,000 82,000 80,000 Net operating income (loss). $ (36,500) $ 78,000 $ (125,000) The cost of goods sold and shipping expense are both variable. All other costs are fixed. Required: 1. List any weaknesses that you see in the company's segmented income statement given above. 2. Explain the basis that is apparently being used to allocate the corporate expenses to the regions. Do you agree with these allocations? Explain. 3 . Prepare a new contribution format segmented income statement for May. Show a Total col- umn as well as data for each region. In addition, for the company as a whole and for each sales region, show each item on the segmented income statement as a percent of sales. 4 . Analyze the statement that you prepared in part (3) above. What insights do those statements reveal that you would bring to management's attention? PROBLEM 6-27 Incentives Created by Absorption Costing; Ethics and the Manager LO6-2 Carlos Cavalas, the manager of Echo Products' Brazilian Division, is trying to set the production
