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 company's first effort at preparing a segmented income statement for May is given below. Sales Region Central $ 801,000 Sales Regional expenses (traceable): Cost of goods sold Advertising Salaries Utilities Depreciation shipping expense Total regional expenses Regional income (loss) before corporate expenses Corporate expenses: Advertising (general) General administrative expense Total corporate expenses Net operating income (loss) West $ 313,000 East $ 698,000 99,000 105,000 241,000 314,000 237,000 238,000 58,000 51,000 110,000 9,000 15,900 13,500 19,000 33,000 27,000 14,000 26,000 41,000 304,000 603,900 743,500 9,000 197,100 (45,500) 13,000 40,000 35,000 22,000 22,000 22,000 35,000 62,000 57,000 $ (26,000) $ (135,100) $ (102,500) The cost of goods sold and shipping expense are both variable. All other costs are fixed.