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 West Sales $ 311,000 Central $ 805,000 East $ 699,000 Regional expenses (traceable): Cost of goods sold Advertising Salaries 93,000 235,000 317,000 101,000 239,000 242,000 56,000 55,000 111,000 Utilities 9,200 15,800 13,500 Depreciation 22,000 33,000 26,000 Shipping expense 18,000 30,000 45,000 Total regional expenses 299,200 607,800 754,500 Regional income (loss) before corporate expenses 11,800 197,200 (55,500) Corporate expenses: Advertising (general) 14,000 43,000 35,000 General administrative expense 21,000 21,000 21,000 Total corporate expenses 35,000 64,000 56,000 Net operating income (loss) $ (23,200) $ 133,200 $(111,500) The cost of goods sold and shipping expense are both variable. All other costs are fixed.