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 performance, management has requested that the monthly income statement be segmented by sales region. The companys first effort at preparing a segmented income statement for May is given below.

	Sales Region
	West	Central	East
Sales	$ 312,000	$ 803,000	$ 697,000
Regional expenses (traceable):
Cost of goods sold	91,000	244,000	315,000
Advertising	102,000	241,000	238,000
Salaries	58,000	53,000	112,000
Utilities	8,600	16,300	14,300
Depreciation	24,000	32,000	28,000
Shipping expense	18,000	26,000	44,000
Total regional expenses	301,600	612,300	751,300
Regional income (loss) before corporate expenses	10,400	190,700	(54,300)
Corporate expenses:
Advertising (general)	12,000	41,000	35,000
General administrative expense	21,000	21,000	21,000
Total corporate expenses	33,000	62,000	56,000
Net operating income (loss)	$ (22,600)	$ 128,700	$ (110,300)

The cost of goods sold and shipping expense are both variable. All other costs are fixed.

Required:

3. Prepare a new contribution format segmented income statement for May.