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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.

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 $ 313,000 $ 800,000 $ 703,000
Regional expenses (traceable):
Cost of goods sold 92,000 239,000 320,000
Advertising 101,000 242,000 239,000
Salaries 59,000 56,000 115,000
Utilities 9,100 16,000 14,100
Depreciation 25,000 30,000 28,000
Shipping expense 18,000 32,000 37,000
Total regional expenses 304,100 615,000 753,100
Regional income (loss) before corporate expenses \ 8,900\ 185,000 (50,100 )
Corporate expenses:
Advertising (general) 18,000 42,000 35,000
General administrative expense 19,000 19,000 19,000
Total corporate expenses 37,000 61,000 54,000
Net operating income (loss) $ (28,100 ) $ 124,000 $ (104,100 )

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

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