Drenthe BV of the Netherlands is a wholesale distributor of Dutch cheeses that it sells throughout the European Community. Unfortunately, the company's 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 company's accounting department has prepared the following statement for March, the most recent month. (The Dutch currency is the euro which is designated by .) Sales T Southern EuropeEurope Europe 311,000 804,000 698,000 Middle Northern Sales Territorial expenses (traceable): Cost of goods sold Salaries Insurance Advertising Depreciation Shipping 98,000 240,000 52,000 16,000 05,000241,000 9,000 32,000 34,000 311,000 105,000 13,500 242,000 29,000 39,000 55,000 8,700 13,000 Total territorial expenses 298,700615,000 739,500 Territorial income (loss) before corporate expenses 12.300 80 4100) Corporate expenses Advertising (general) General administrative 8,000 38,000 20,000 20,000 38,000 20,000 Total corporate expenses 38,000 58,000 58,000 Net operating income (loss) (25,700) 131,000 (99,500) 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.)