I need an income stament. answer the questions in the photoChapter $6-$ PROBLEM $6-26$ Restructuring a Segmented Income Statement

Losses have been incurred at Millard Corporation for some time. In an effort to isolate

the problem and improve the company's performance, management has requested

that the monthly income statement be pented by sales region. The company's first

effort at preparing a segmented statememis given below. This statement is for May,

the most recent month of activity.

Cost of goods sold and shipping expense are both variable; other costs are all fixed.

Millard Corporation is a wholesale distributor of office products. It purchases office products from

manufacturers and distributes them in the three regions given above. The three regions are about the

same size, and each has its own manager and sales staff. The products that the company distributes

vary widely in profitability.

Required:

List any disadvantages or weaknesses that you see to the statement format illustrated on the

previous page.

Explain the basis that is apparently being used to allocate the corporate expenses to the regions.

Do you agree with these allocations? Explain.

Prepare a new contribution format segmented income statement for May. Show a Total column

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.

Analyze the statement that you prepared in part $(3)$ above. What points that might help to

improve the company's performance would you bring to management's attention?