Drenthe BV of the Netherlands is a wholesale distributor of Dutch cheeses that it sells throughout the European Community Unfortunately, the companys profits have been declining, which has caused considerable concern To help understand the condition of the company, the managing director of the company has requested that the monthly income statement be segmented by sales territory Accordingly, the companys accounting department has prepared the following statement for March, the most recent month (The Dutch currency is the euro which is designated by ) Cost of goods sold and shipping expenses are both variable other costs are all fixed Drenthe BV purchases cheeses at auction and from farmers cooperatives, and it distributes them in the three territories listed above Each of the three sales territories has its own manager and sales staff The cheeses vary widely in profitability some have a high margin and some have a low margin (Certain cheeses, after having been aged for long periods, are the most expensive and carry the highest margins ) Required 3 Prepare a new segmented contribution format income statement for May Show a Total column as well as data for each territory In addition, for the company as a whole and for each sales territory, show each item on the segmented income statement as a percent of sales (Note columns may not total due to rounding ) (Round percentage answers to 1 decimal place (i e 1234 should be entered as 12 3) ) Sales Territo Southern Europe 515,000 1,144,000 Middle Europe Northern Europe 783,000 Sales Territorial expenses (traceable) Cost of goods sold Salaries Insurance Advertising Depreciation Shipping 149,000 80,500 25,700 147,500 44,500 30,000 410,000 60,500 17,700 249,500 40,500 51,000 328,000 113,500 15,200 250,500 37,500 56,000 Total territorial expenses 477,200 829,200 800,700 Territorial income (loss) before corporate expenses 37,800 314,800 (17,700) Corporate expenses Advertising (general) General administrative 35,000 45,500 58,400 38,700 60,100 62,500 Total corporate expenses 80,500 97,100 122,600 Net operating income (loss) (42,700) 217,700 (140,300)

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Drenthe BV of the Netherlands is a wholesale distributor of Dutch cheeses that it sells throughout the European Community. Unfortunately, the companys profits have been

Drenthe BV of the Netherlands is a wholesale distributor of Dutch cheeses that it sells throughout the European Community. Unfortunately, the companys profits have been declining, which has caused considerable concern. To help understand the condition of the company, the managing director of the company has requested that the monthly income statement be segmented by sales territory. Accordingly, the companys accounting department has prepared the following statement for March, the most recent month. (The Dutch currency is the euro which is designated by .)

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Cost of goods sold and shipping expenses are both variable; other costs are all fixed. Drenthe BV purchases cheeses at auction and from farmers cooperatives, and it distributes them in the three territories listed above. Each of the three sales territories has its own manager and sales staff. The cheeses vary widely in profitability; some have a high margin and some have a low margin. (Certain cheeses, after having been aged for long periods, are the most expensive and carry the highest margins.)

Required:

Prepare a new segmented contribution format income statement for May. Show a Total column as well as data for each territory. In addition, for the company as a whole and for each sales territory, show each item on the segmented income statement as a percent of sales. (Note: % columns may not total due to rounding.) (Round percentage answers to 1 decimal place (i.e .1234 should be entered as 12.3).)

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Sales Territo Southern Europe 515,000 1,144,000 Middle Europe Northern Europe 783,000 Sales Territorial expenses (traceable) Cost of goods sold Salaries Insurance Advertising Depreciation Shipping 149,000 80,500 25,700 147,500 44,500 30,000 410,000 60,500 17,700 249,500 40,500 51,000 328,000 113,500 15,200 250,500 37,500 56,000 Total territorial expenses 477,200 829,200 800,700 Territorial income (loss) before corporate expenses 37,800 314,800 (17,700) Corporate expenses Advertising (general) General administrative 35,000 45,500 58,400 38,700 60,100 62,500 Total corporate expenses 80,500 97,100 122,600 Net operating income (loss) (42,700) 217,700 (140,300)