he following is a financial information from MayPagAsaPa Company: Segment Sales West Central East Sales 450,000 800,000 750,000 Segment expenses (traceable) Cost of Goods Sold 162,900 280,000 376,500 Advertising 108,000 200,000 210,000 Salaries 90,000 88,000 135,000 Utilities 13,500 12,000 15,000 Depreciation 27,000 28,000 30,000 Shipping expense 17,100 32,000 28,500 Total segment expense 418,500 640,000 795,000 Segment 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) Additional information: The company purchase office supplies from big manufacturers and distributes among different segments. Cost of goods sold and shipping expenses are both variable.

Required:

1. Prepare a new contribution format segmented income statement.

2. Analyze your requirement #1. What points that might help to improve the companys performance would you bring to managements attention?

3. Compare your output with Requirement 1 with the information above. List the items you think that is an error/disadvantage/weakness of the given data.

4. What basis was used to allocate the corporate expenses to the segments. Do you agree with these allocations? Explain.